The United States and Saudi Arabia seem to have an understanding to keep the oil market well supplied and avoid a significant price rise after the U.S. reimposition of sanctions on Iran.

The basic bargain appears to be that the United States will impose tough sanctions that curb Iran's oil exports and in return Saudi Arabia will avoid a damaging and politically controversial spike in prices.

(MIS)UNDERSTANDING?The United States and Saudi Arabia may have reached a detailed agreement on how to handle the prospective reduction of Iranian oil exports and its impact on oil prices.

Neither the Trump administration nor Saudi Arabia will want to be blamed for driving oil prices significantly higher.

The U.S. president has already said that oil prices are "artificially very high" and this "will not be accepted," while Saudi Arabia has been trying to push prices higher, and resisting calls for it to ease production curbs.

Saudi officials have said that the market can absorb higher prices, though they do not want them to rise too much.

In the end, Saudi Arabia and the United States may have very differing views about what would constitute an unacceptable spike in oil prices in response to the reimposed sanctions.

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