However, Saudi Arabia still has the confidence of oil markets for now, which have been reassured by Saudi Energy Minister Khalid al-Falih that Saudi will turn on the pumps to make up for less Iranian crude. Al-Falih said on Monday that Saudi can raise its output to 11 million barrels a day and that it will not use oil as a weapon. Saudi output has already increased to about 10.7 million barrels a day.

“There is no intention,” the energy minister told Russia’s TASS news agency when asked whether there could be a replay of the 1973-style oil embargo.

“When Khalid al-Falih comes out and says we’re going to do 11 million barrels a day, he maintains a lot of credibility with the market,” said Helima Croft, RBC head of commodities strategy. “If he changed his tune, the market would take that threat seriously.”

Another factor holding down oil prices is the fall off in global oil demand. Analysts say for now, trade wars with China and a stronger dollar are working in favor of lower prices, by dampening emerging market demand.

“There’s been a modest slowdown but I think there’s a more serious risk of slowdown in 2019. That assumes the dollar continues to stay bid,” said Aakash Doshi, commodities analyst at Citigroup. “..the downside risk to economic growth globally is not coming from the U.S. but likely coming from EM.”

Doshi said his base case is that Saudi Arabia will continue to provide the supply it promises, and the market is expecting that as well. He expects Brent crude to average just under $80 per barrel in the fourth quarter and in the high $70s in the first quarter.

Croft said even with increased Saudi output, the market could be tight at year end, particularly if there are any losses of barrels form Nigeria or Libya. The U.S. is producing about 11 million barrels a day, but a lack of pipeline capacity has made it difficult to move oil from the Permian basin in Texas, and by the second half of next year that situation should improve, putting more U.S. oil onto the world market.