Tuesday, 12 Jun 2012 11:51 AM

By Forrest Jones

OPEC member Saudi Arabia has been pumping hefty amounts of oil to lower prices and do what it can to ensure that President Barack Obama is re-elected this November, says billionaire real estate mogul Donald Trump.

Saudi Arabia has ramped up production this year to offset any supply disruptions that could result from a military conflict between the West and Iran.

The U.S., Israel and Europe accuse Iran of enriching uranium to develop a nuclear weapons program, a charge Tehran denies.

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Disputes earlier this year escalated to the point Iran threatened to close off the Strait of Hormuz, a narrow waterway connecting oil-rich Persian Gulf nations with the rest of the world, which sent oil prices soaring.

Iran has agreed to talks with delegates from the U.S., U.K., China, France, and Russia and Germany, which has brought prices down to around $82 today from over $110 earlier this year.

"I think Saudi Arabia is doing Obama a big favor. I think he is saying 'look, you have to do me a favor, I have to get elected, and you can't keep doing like you've been doing the last three years driving it up to $150 because that's where it was going,'" Trump tells CNBC.

"I think Saudi Arabia is doing Obama a big fat favor. I think he asked for the favor and prices are coming down, but also the economy's going bad so maybe it won't help that much," Trump adds.

Trump has criticized the Obama administration in the past of not doing enough to address OPEC influence on prices.

If Obama wins reelection, expect the Saudis and other OPEC nations to curtail production in order for prices to rise.

"Assuming if Obama got elected, you're going to see something with oil like you've never seen before, it will go through the roof. The favor will be repaid many times over," Trump says.

OPEC oil ministers are meeting in Vienna to address production levels and determine if prices are too high, too low or just right.

At a December meeting, OPEC nations agreed to hold output steady at 30 million barrels a day.

Member nations remain divided, with one camp headed up by the Saudis favoring increased production and lower prices, the idea being that higher prices can cool global economies and cut into demand.

Another camp, bolstered by Iran and Venezuela, favor less output and higher prices.

Politics aside, such hawkish OPEC members may want to hold off on major output cuts in light of the fragile European economy, experts say.

"To a large extent, oil policy appears to be on a watching brief for the rest of the quarter until the Greek and Iranian issues have more clarity," says Barclays Capital analyst Paul Horsnell, according to the AFP newswire.

"Unless OPEC is pushed towards action by a sharp lurch down in prices, the status quo of watch-and-see is likely to continue and ... an end to (prices above $100) ... does not seem sufficiently provocative in itself to produce action."

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