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26 February 2024

Saudi rebuffs report on its oil output

By Staff

Saudi Arabia has rebuffed Western reports that it had approached output limits and would be difficult for it to further raise production, saying it has the capability to pump close to capacity of 12.5 million barrels per day.

Saudi oil minister Ali Al Nuaimi was reacting to a recent report by Reuters news agency that the Gulf Kingdom, the world’s oil basin, is nearing its comfortable operational production limits and may struggle to do much to make up for shortages that arise from new Western sanctions on Iran.

Reuters quoted what it called industry sources as saying Riyadh is now pumping just under record rates of 10 mbpd and that heavy investments over the past years allow it “on paper” to boost supplies to 12.5 million bpd.

But the agency added that pumping anywhere near the declared production capacity might involve extracting heavy crudes the market might not want. It would also be difficult to sustain higher rates for lengthy periods.

“Saudi Arabia can produce 12.5 million bpd…do you believe sceptics or us,” Nuaimi told the London-based Saudi Arabic language daily Sharqalawsat.

The paper said Nuaimi refused to link Saudi Arabia’s idle output capacity to sanctions on Iran, adding that the Kingdom is committed to its clients.

“Saudi Arabia is committed to ensuring supplies to its clients…South Korea and Japan have been Saudi Arabia’s customers for 20 years….we are capable of meeting the needs of all our clients in a guaranteed way.”

Saudi Arabia, which controls over a fitth of the world's extractable crude deposits, has accounted for the bulk of Opec's idle oil output capacity for most of the time.