Oil futures were climbing on Thursday, with US crude hovering at its highest in about 3-1/2 years as supply disruptions continue to support the market. The 15 member states are Iran, Iraq, Saudi Arabia, Venezuela, the UAE, Qatar, Nigeria, Libya, Kuwait, Gabon, Equatorial Guinea, Ecuador, Congo, Angola and Algeria. This must be a two way street.
"If Libya's oil doesn't return fast to the market it will be an important test to OPEC's spare capacity, especially given that output from Venezuela and Iran is expected to fall significantly in the next couple of months", he added.
If the Saudis are indeed prepared to cave to Trump, it creates an existential threat to OPEC which may see Iran and other members quit immediately, if Riyadh has made a unilateral decision to pump more.
Brent crude futures LCOc1 were at $77.82 per barrel, up 6 cents from their last close.
Trump's tweet triggered reaction from Iran, a founding member of OPEC, whose oil exports have been targeted by USA sanctions.
This is while world oil prices have climbed higher as the Trump administration has pressured U.S. allies to end all purchases of oil from Iran.
The OPEC Basket price per barrel of crude oil is about $74.
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Iranian President Hassan Rouhani downplayed the seriousness of the ban, saying he is confident Iran will survive this round of U.S. sanctions as it has other sanctions in the past. Washington has since told countries they must stop buying Iranian oil from November 4 or face financial measures.
But Tehran has threatened to take drastic action on the oil supply in retaliation against Trump's attempt to curb its exports.
Last month, Saudi Arabia and Russian Federation agreed to increase production and the USA continues to produce at record levels, however, unless there is a drop in demand, it appears we are headed toward a supply deficit later this year.
The Strait of Hormuz is of major strategic importance.
Iranian OPEC Governor Hossein Kazempour Ardebili said on Thursday that Trump had raised oil prices through his tweets. "As a result, American consumers would have to pay the price of Trump's unilateralism at gas stations", he said.
Iran has threatened to block oil exports through a key Gulf waterway in retaliation against any hostile USA action.
Oil prices edged up on Wednesday, lifted by a report of declining US fuel inventories amid the ongoing crude supply outage at Syncrude Canada in Alberta, which usually supplies the United States.