From The Wall Street Journal

Saudi Arabia has pressed independent energy analysts to alter their estimates of its oil production, people familiar with the matter said, a move that could put it in conflict with other members of the fractious Organization of Petroleum Exporting Countries.

The world’s largest oil exporter has told OPEC it cut output in July, according to delegates, but estimates from the U.S. government and independent agencies say it boosted production—amounting to a huge difference of as much as half a million barrels a day.

The data showing differing trends between official and independent estimates of Saudi output is set to be published Monday in the cartel’s monthly report, potentially causing confusion in trading markets about how much oil is reaching consumers.

“The Saudis have been giving the impression they know what they are doing…They could lose credibility,” said John Hall, chairman of U.K. consultancy Alfa Energy.  “It could increase volatility” in prices.

The kingdom has called some agencies over the last week, asking that analysts change their estimates, according to people familiar with the discussions. Some agencies rebuffed the request but others bowed to the pressure, they said.

There is no specific requirement that Saudi Arabia accurately report its production but the discrepancy is highly unusual and adds to tensions within OPEC over whether to boost output.

Saudi officials told OPEC delegates last weekend that the kingdom’s production had fallen by 200,000 barrels to 10.29 million barrels a day in July, according to energy ministry officials. Oil prices rose 1.6% in New York Monday.

But according to New York-based S&P Global Platts, a provider of energy information, Saudi production increased to about 10.6 million barrels a day last month. The Energy Information Administration, a branch of the U.S. Department of Energy, arrived at the same estimate.

The number, which Platts said it was standing by, would represent Saudi’s highest level of production since mid-2016 and would exceed an agreement it made that year with other oil-producing nations to cut production in order to stabilize prices.

The agencies use contacts in governments, storage information and ship-tracking data to provide what tends to be reliable data on the kingdom. With their data, “there is no agenda, there is no ulterior motive,” Mr. Hall said.

The lack of consensus extends to the kingdom itself. A Saudi oil official and an adviser said they were told privately the country’s production is higher than the official figures.

Saudi Arabia’s energy ministry didn’t return a request for comment.

But Saudi officials say discrepancies over the kingdom’s production reflect dueling political pressures from the U.S. and Iran. The U.S., concerned about rising fuel prices, wants Saudi Arabia to replace Iranian oil because it is about to ban Tehran’s crude exports under revived sanctions.

Iran has criticized Saudi Arabia for increasing output, alleging it’s a way to respond to U.S. pressure rather than market needs.

Russia, Saudi Arabia and others “are increasing production by one million barrels a day to squeeze the [buyers] of oil from Iran,” Iran’s OPEC envoy Hossein Kazempour said in a recent interview with The Wall Street Journal. “They are extending their hand of support to Trump. It’s a very hostile attitude against us.”

The Saudi discrepancy comes as other members are also alleging analysts are overestimating their production.

Iraq, OPEC’s second largest producer, is also disputing independent assessments showing it only respected 12% of its agreed cuts in June. “We are going to refuse these figures,” Iraq’s State Oil Marketing Organization said in a letter to at least three independent agencies earlier this month.

Legal Notice