Oil prices had risen on Friday on worries that U.S. sanctions against Iran would take away significant volumes of crude oil from world markets while oil demand worldwide increases.
Saudi Arabiasaid it would "use its spare capacity when needed to deal with any future changes in oil supply and demand rates, in coordination with other producing countries", according to a report by the Saudi Press Agency.
The US president tweeted on Saturday that the Saudi king had agreed to raise production to cut the cost of oil for consumers.
The fall came as the Russian Energy Ministry said on Monday that the country's oil output increased to 11.06 million barrels per day in June from 10.97 million barrels per day in May.
Saudi Arabia now produces some 10 million barrels of crude oil a day.
"Your tweets have increased the prices by at least $10".
In response to the recent comments, Robbie Diamond, SAFE's CEO and President, said in a statement: "Asking the cartel to increase output is like trying to put a Band-Aid on a broken system that shouldn't even exist in the first place".
From a wider perspective, the barrel of WTI remains supported amid tighter oil markets, as the U.S. sanctions on Iran looms, which could threaten Iran's oil exports.
Reuters cited industry sources as confirming UAE production was at 2.87 million bpd in July, meaning it has the potential to boost supplies by 400,000 bpd. Keeping oil price around $70 per barrel serves both economic and political objective.
To this end, the New York Times says that "Saudi help in making up for lost Iranian crude oil will be crucial to Mr. Trump's efforts to contain Iran while not forcing prices up too high to cause political damage in the United States". Oil hesitated at the start of the week, but traders are coming back to the buy side of the table as markets realized Saudi Arabia is in no rush to push oil prices higher again after recently pushing OPEC to lift production limits just last month. This track record is important because USA lawmakers have resurrected the "No Oil Producing and Exporting Cartels Act", or NOPEC, which could make the group subject to the Sherman antitrust law, used more than a century ago to break up the oil empire of John Rockefeller.
China is the largest importer of Iranian oil with 24 percent, followed by India with 18 percent.
US President Donald Trump announced on June 30 that Saudi Arabia's King Salman had agreed to increase Saudi oil output by two million barrels per day to make up for the expected collapse in Iranian production. The two main importers of Iranian crude are China and India; both of whom import around 400,000 BPD now.
"In this battle", he said, "any country that tries to take Iran's place on the oil market will be guilty of treason against Iran. and surely one day it will pay the price of this treason".