A day later, Saudi Arabia's state producer lowered August pricing for most crude grades in Asia and Europe and cut them for all grades headed to the US.
"We are working to minimize disruptions to the global market, but we are confident that there is sufficient global spare oil production capacity", Brian Hook, the director of policy planning, said on July 2.
Iran's Petroleum Minister Bijan Zanganeh says there has been no major change in the country's production and export of crude oil despite recent threats by US President Donald Trump to halt the oil trade activities of the Islamic Republic.
The oil minister also said that Iran, which is Opec's third-largest producer, has not changed its oil production and exports amid growing United States pressure.
Oil futures are trading near three-year highs as disruptions in Canada and Libya, along with slumping production in Venezuela and a USA call for allies to stop buying from Iran, have overshadowed a pledge by OPEC and allies to add 1 million barrels a day.
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"We believe that, while a large volume of barrels will be returned over the coming months, likely upwards of 1 million barrels per day, the Kingdom will be reluctant to exhaust its substantial spare capacity", the analysts added. He warned India against importing oil from the US, Saudi Arabia, Russia and others and said that if this happens then Iran will deprive India of all special privileges which have been extended to it.
On Saturday, Zanganeh was quoted as saying that the U.S. president had insulted OPEC by trying to force Saudi Arabia to increase its production. The unofficial leader of the Organisation of Petroleum Exporting countries has never pumped more than 10.6 million barrels per day on average over a single month, according to BAML.
The sources said Saudi Arabia supplied 10.579 million bpd in June, a figure that includes domestic consumption and all exports, including from storage tanks.
"It is possible the kingdom could lift production by another 1.3 million-1.4 million bpd beyond anything it has ever produced before but at the moment there is no way of knowing for certain", Reuters added.
Boosting production this way might risk a decline in oilfield pressure that could result in long-term damage to the reservoirs. But now there is growing worry that even a one-million-bpd increase will not be enough.