King Salman briefed the cabinet on the telephone call he had received from President Donald Trump during which the two leaders confirmed the need to exert efforts to maintain the stability of oil markets and the growth of the world economy.
In a Tuesday statement, Saudi Arabia asserted its willingness to use spare production capacity to increase market supply.
The White House later backtracked on the president's tweet, while Saudi Arabia did not confirm Trump's comments.
Along with OPEC+ curbing output by 1.8 Mbd, Venezuela's crude oil production continues to decline and could soon drop under 1 Mbd, depriving the market-and specifically US refiners-of a major oil supplier. He has tweeted about the Organization of Petroleum Exporting Countries at least 63 times since 2011, repeatedly saying the group is "ripping us off" and that crude should cost no more than $25 a barrel. An increase in any nation's output beyond limits that OPEC set in 2016 would breach the agreement, he said.
USA crude inventories fell by 4.5 million barrels in the week to June 29 to 416.9 million barrels, according to the American Petroleum Institute (API) on Tuesday.
Analysts are of the view that if the United States is successful at convincing most from buying Iranian oil, outages could rise to as high as 2 million barrels per day (bpd).More news: Election of new Mexican president adds uncertainty to future of NAFTA talks
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Voluntary supply cuts by OPEC and some non-OPEC suppliers like Russian Federation have tightened world oil markets since 2017, and unplanned disruptions from Canada to Venezuela and Libya along with upcoming new USA sanctions against major exporter Iran have sparked concerns of supply shortfalls. After leading the Organization of Petroleum Exporting Countries and its allies to cut production at the start of previous year, the kingdom has seen its hold on the world's top oil consuming region reduced as rivals from the U.S.to Iran boost exports.
Saudi Arabia, which has been pumping about 10 million barrels per day, holds the largest spare capacity in the world and is the only country that can add substantial supply to the market.
Last week, Saudi Arabia was one of several countries that agreed to boost production by a combined 700,000 to one million barrels per day. Keeping oil price around $70 per barrel serves both economic and political goal.
"Recurring salvos in the trade war and falling asset prices raise the question of how much tariffs could damage the global economy, U.S. bank JP Morgan said in a note".
"Our view is clear: The stronger the implementation and enforcement of a zero Iranian export scenario, the higher the oil price will go, with $100 per barrel crude a distinct possibility", it said.
Immediately after the moot, the US Energy Secretary Rick Perry emphasised that the deal between global oil producers to boost crude output was not enough to relieve global oil markets that are stressed by supply constraints.