By Phillip Cornell
Russia’s Energy Minister Novak, Saudi Arabia’s Energy Minister al-Falih and OPEC Secretary General Barkindo attend an OPEC meeting in Vienna By LEONHARD FOEGER / REUTERS

The announcement that the U.S. will not extend waivers for Iran oil export sanctions beyond May 2 sent oil prices up, though President Trump and Secretary of State Mike Pompeo signaled that Saudi Arabia and the United Arab Emirates would add supplies.

The big picture: This plan could strain production cuts Riyadh agreed to in December with OPEC, Russia and others that have buoyed prices by 37% in 2019. Saudi Arabia’s broader cooperation with OPEC+ since late 2016 has provided much-needed cash to mitigate deficits, burnish sovereign assets for mortgage and fund the Crown Prince’s economic transformation plans.

Where it stands: Iran exported about 1.1 million barrels per day (b/d) this month. Saudi Arabia and the UAE could quickly add about 1.5 million b/d, but that would breach OPEC+ targets, up for review in June. Having cut beyond its targets, Saudi Arabia could pump an additional 500,000 b/d and still comply with the outstanding deal.

The impact: All this puts pressure on the 2.5-year-old OPEC+ arrangement, and specifically the Saudi-Russian partnership.

Click here to read the full article on Axios.