Economy

Saudi air defences intercept two missiles over Riyadh

Saudi air defences intercept two missiles over Riyadh

But a drop in Iranian exports due to a return of US sanctions, plus involuntary supply losses in other OPEC members such as Venezuela, would mean the supply cut would be significantly larger than intended.

The US withdrawal from the Iranian nuclear deal is raising worries about the effect on crude oil supplies.

Jubeir's renewed vow came after US President Donald Trump pulled the United States out of an accord created to prevent Tehran's alleged quest for the bomb.

In April, the Houthis fired a barrage of ballistic missiles targeting Saudi Arabia, with fragments of one missile over Riyadh killing one person and wounding two.

USA shale producers could also increase their output but it would take time and their light crude is not a good substitute for heavier Iranian oil. A decade ago, Iran' and Saudi Arabia's neighbor, the United Arab Emirates, pledged not to engage in any enrichment or reprocessing activities whether the materials and facilities were supplied by the United States or others.

Riyadh and Tel Aviv have been working covertly to normalize ties and form an alliance against Iran based on their opposition to the nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), and the Islamic Republic's growing regional influence. That raised worries of a quick rise in oil prices.

The original agreement between the Organization of the Petroleum Exporting Countries, led by Saudi Arabia, and other oil exporters, led by Russian Federation, set output levels in December 2016.

Oil prices are stable because of market stability, he said, because OPEC's goal "is not prices but market stability and lowering storage levels".

The agreement puts limits on Iran's nuclear programme in exchange of the lifting of worldwide sanctions.

The collapse in Venezuelan output has reduced production much more than intended and caused global oil inventories to draw down much faster than OPEC predicted at the end of past year. Saudi Arabia, the UAE, Bahrain and Egypt imposed a trade and transport boycott in June, accusing Doha of financing militant groups and cozying up to Iran.

The result has been a sharp increase in prices, which has been broadly welcomed by OPEC members, especially Saudi Arabia, which needs the revenues to pay for its ambitious transformation programme.

It was the busiest day in USA front-month contracts since August, and for Brent the busiest in nearly a month.

In an apparent reference to Iran, bin Salman last month that his country and Israel have "a common enemy" and that they could immediately normalize their relations once the Palestine issue is resolved.

"Every couple of days, we have missiles coming from Yemen and we see evidence that they are made by Iran ..."

The world's top oil exporter has previously said it wants nuclear technology only for peaceful uses, but has left unclear whether it also wants to enrich uranium to produce nuclear fuel, a process which can also be used in the production of atomic weapons.

"We have managed to put together this new alliance between OPEC and non-OPEC".