The United States is pressing Saudi Arabia to boost oil output to fill a likely supply gap arising from sanctions on Iran, Gulf sources told Reuters, adding that such an increase is unlikely before July.
'There were talks held between Saudi and the US and the US 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,' one Gulf official said.
A European Union embargo on Iranian crude takes effect on July 1. US and European financial sanctions have made it difficult for other importing nations to process payments for Iranian crude.
'There will not be any surprises in Saudi production over the coming few months, we are yet to see what demand in April will be. But generally production will stay up or down 200,000 barrels per day from the current 9.8 (million bpd),' the official said.
'The situation is still not clear, by July there will be a clearer picture,' another Gulf source said.