US President Donald Trump has tried to calm jittery oil markets by suggesting Saudi Arabia is willing to use up to 2 million barrels per day in spare capacity to meet any supply shortages arising from US sanctions on Iran, writes Nassir Shirkhani.

Saudi Arabia had political reasons to respond positively to Trump's request, given its animosity to arch-rival Iran, which Trump is trying to bring to its knees through strict new sanctions.

Trump has urged major buyers of Iranian oil to halt imports by his deadline of 4 November.

However, oil prices have shot up and Trump, worried about the impact on US voters ahead of November midterm elections, is appealing to the Saudis for help.

Yet despite Riyadh voicing support for Trump, Saudi Arabia may find it tough to compensate for future losses from Iran and persistent supply disruptions from Libya and Venezuela.

Oil Industry experts believe Opec’s biggest member can raise output by about 1 million bpd to 11 million bpd and even that would be a tall order in the short term.

Saudi Arabia has notably refrained from saying how big an output increase may happen.

There are also worries that such a move risks backfiring by leaving the world without a visible safety cushion to lean on in the event of major new threats to global supplies.

The Saudis need to invest heavily and work hard to be able to produce at sustained levels of 12 million bpd.

The Trump-Saudi campaign to calm oil markets will by tested severely in the coming months as sanctions bite deeper into Iran’s exports, risking even higher crude prices.

Weekly

Crude test for Saudis