“There were talks held between Saudi and the U.S., and the U.S. asked if Saudi could be accommodating once the sanctions take effect in July. And the Saudi response was that it was ready to meet demand in the market if required, but would not like to take part in the politics.”-unnamed Saudi Arabian official

The U.S. demand came at the current IEF meeting in Kuwait. It was at the beginning of that meeting that IEF officials confirmed there was a glut of oil on the markets.  So why would the U.S. demand Saudi Arabia increase oil production?

One clue comes from Edward Markey, the top Democrat on the House Natural Resources Committee: “If Iran won’t stop saber rattling, and the Saudis won’t eliminate Iran’s leverage by producing more oil, then it’s time to release oil from the Strategic Petroleum Reserve to send these countries a message that the U.S. economy won’t be held hostage for months.”

But wait, I though the U.S. oil industry is being flooded with oil from Canada and the U.S. state of North Dakota? And why is there this talk of “months”, and “July”?

The European Union’s oil sanctions go into effect in July.  But that shouldn’t be too big of a deal, considering Iran has already stopped oil shipments to at least two European countries, and threatens to cut off more oil shipments.

Now, just one day after the U.S. made its demands on Saudi Arabia, the Saudis say they will comply: “…Saudi Arabia and others remain poised to make good any shortfalls, perceived or real, in crude oil supply.”-Ali al-Naimi, Oil Minister of Saudi Arabia

Notice he added “perceived or real”.  This means if the U.S. tells them there’s a shortage, even if there isn’t they’ll increase production. This is significant because just days before Saudi officials told Reuters’ reporters that they would increase oil production only if there was an true oil shortage!

Reuters reported that the West vs Iran tensions are getting little attention at the IEF meeting.  However, the Iranian representative indicated that the U.S. was using oil simply as a weapon, with no concern about how it affects the average person: “Unfortunately some big countries who are among the major energy consumers, view oil as one of the basic constituents in their military, security and political strategies and use it as a political tool against oil producing countries. Exerting unilateral economic constraints of political instigations is a threat, which jeopardizes free trade and continuity of oil supply in the world.”-Rostam Ghasemi, Oil Minister of Iran