This is already seen as part of a political campaign by the U.S. to pressure the kingdom to ramp up oil production quickly to make up for the loss of Iranian barrels which the Trump administration has threatened to bring down to zero.
That's good news for ASX-listed oil stocks - many of which have seen which have seen gains this year.
West Texas Intermediate crude was trading just under $74 per barrel Friday, and Brent was at about $77 per barrel.
The U.S.is demanding zero purchases of Iranian oil by November, and if that were possible, oil could spike above $120 per barrel, given global crude supplies, says Bank of America Merrill Lynch.
They argued that since Saudi Arabia had never pumped more than 10.6 million bpd, could it now increase production and make up for any missing Iranian volumes?
Analysts are skeptical the USA can keep even half the Iranian exports of about 2.4 million barrels a day from the market, but some have raised their expectations since US officials began talking up their goal of removing all Iranian exports.
Blanch is skeptical that the kingdom could pump 12 million or more barrels a day.
Following Trump's decision to quit the historic Iran nuclear pact on May 8, the United States vowed to re-impose sanctions lifted under the accord against Tehran and inflict punishments like secondary sanctions on nations that have business links with Tehran.
Opec agreed with Russian Federation and other oil-producing allies last month to raise output from July, with Saudi Arabia pledging a "measurable" supply boost but giving no specific numbers.
The move by South Korea, one of Iran's main customers in Asia along with China and Japan, comes as it is in talks to seek an exemption from United States curbs on buying Iranian oil, in line with a waiver it received during previous sanctions, Reuters reported.
Zanganeh said that exerting pressure as such was against the principles of the Organization of the Petroleum Exporting Countries (OPEC) in which both Saudi Arabia and Iran are founding members.
The required increase would be even higher if other OPEC and non-OPEC countries struggle to raise their output or more production is lost as a result of problems in Venezuela and Libya.
The analysts estimate that every million barrel per day shift in supply and demand balances would push oil prices by $US17 a barrel on average.
This article first appeared on Business Insider Australia, Australia's most popular business news website.
"In this game of chicken, we expect someone will blink before that happens", they wrote.