(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)

LONDON (Reuters Breakingviews) - Donald Trump’s OPEC smackdown is more relevant than it looks. The U.S. president used Twitter to slam the oil-producing group on April 20 for output cuts that have helped drive oil prices up to their highest levels since late 2014, at about $74 per barrel. Whether or not Trump has read all 134 pages of last month’s annual oil report from the International Energy Agency, the intervention could jolt OPEC back to the thinking it needs.

The cartel probably merits the judgement of a separate IEA report, out on April 13, that acknowledged its cuts have succeeded. The group and allies like Russia have stayed sufficiently disciplined to take 2.4 million barrels per day from a market with a total capacity of 98 million barrels daily. Helped by supply headaches in Venezuela, they actually overdelivered, meaning that oil stocks are near their five-year developed-nation average rather than high above that level.

That leaves the market tight at a time when geopolitical risk is ramping up. Sanctions on Iran could send prices up by $5 a barrel, Société Générale analysts reckon. Punitive Rusal-style sanctions on big oil groups in Russia, which produces 11 percent of global oil supply and is the second-biggest exporter, could spur them by much more.

Spikes like that could incentivise U.S shale producers to greenlight new projects. A measured approach from OPEC might be to signal that output cuts could be partially reinstated to stop a splurge of oil production elsewhere. Some attrition may come naturally too. U.S. production could get a bit gummed up as ramped-up drilling drives up costs and makes resources scarcer, although that may not be quite enough to throw the power back into OPEC’s hands completely.

But Saudi Arabia may well be quite sanguine about sanctions on its perpetual Iranian foe – it would be happy to see $100 oil, Reuters reported on April 18. The optimism is self-serving. At that level, the oil giant Saudi Aramco can get closer to a $2 trillion valuation, and crude would trade appreciably above the level at which Riyadh can balance its budget.

Saudi energy minister Khalid al-Falih suggested on Friday it was premature to discuss easing cuts. Should its traditional U.S. ally decide to get more aggressively on its case, Saudi may be more likely to help keep oil prices at a less exalted level. In that sense, Trump’s intervention might one day be seen as timely.

CONTEXT NEWS

- U.S. President Donald Trump on April 20 criticized OPEC for output reductions that have helped raise oil prices and said the action would not be tolerated, as oil prices appeared set for a second consecutive week of gains.

- “Looks like OPEC is at it again,” Trump tweeted. “With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”

- Earlier Saudi Arabia’s energy minister, Khalid al-Falih, had said that global oil inventories had declined from the peak but had still not fallen far enough.

- Falih told reporters at a ministerial panel between OPEC and non-OPEC countries in Jeddah that while inventories at 2.8 billion barrels had fallen significantly below a 2017 peak of 3.17 billion barrels, they were still above levels at the time when the oil glut had started to materialize.

- A global oil glut has been virtually eliminated, according to a joint OPEC and non-OPEC technical panel, two sources familiar with the matter told Reuters on April 19.

- The meeting of the joint committee found that oil inventories in developed nations in March stood at 12 million barrels above the five-year average, one of the sources said, down from 340 million barrels above the average in January 2017.

- Saudi Arabia would be happy to see crude prices rise to $80 or even $100 a barrel, three industry sources told Reuters on April 17.

- Brent was trading at $74 on April 20, having reached its highest level since November 2014. Following Trump's comments it fell to $72.97.

  (Editing by Lauren Silva Laughlin and Ben Kellerman) ((george.hay@thomsonreuters.com; Reuters Messaging: george.hay.thomsonreuters.com@reuters.net))