Peak Oil is You
Donate Bitcoins ;-) or Paypal :-)
Page added on March 13, 2012
U.S. asks Saudis to lift oil output
The United States is pressing Saudi Arabia to boost oil output to fill a likely supply gap arising from sanctions on Iran, Gulf oil officials said, adding that an increase in production is unlikely to be needed before July.
Saudi Arabia is the only producer with spare capacity and oil importers will rely on Riyadh to fill the gap should Iranian output drop.
Saudi Arabia has made clear it will only raise output if it sees additional demand for crude and does not want its oil policy implicated in efforts to disrupt Iran’s atomic program which the West says aims to develop a nuclear weapon.
“There were talks held between Saudi and the U.S. and the U.S. asked if Saudi could be accommodating once the sanctions take effect in July. And the Saudi response was that it was ready to meet demand in the market if required, but would not like to take part in the politics,” one Gulf official said.
The official was speaking at a gathering of energy ministers from producer and consumer nations at the International Energy Forum (IEF) in Kuwait.
Attending the conference, Saudi Oil Minister Ali al-Naimi gave reassurances on Tuesday to importing nations on Riyadh’s willingness to supply more oil if the need arises.
A European Union embargo on Iranian crude takes effect on July 1. U.S. and European financial sanctions have made it more difficult for other importing nations to process payments for Iranian crude.
Oil prices have risen sharply this year to $125 a barrel for Brent crude. Oil traders are keen to know the likely timing of any Saudi supply increase to counter the expected decline from Iran.
“There will not be any surprises in Saudi production over the coming few months, we are yet to see what demand in April will be. But generally production will stay up or down 200,000 barrels per day from the current 9.8 (million bpd),” the Gulf official said. “The situation is still not clear, by July there will be a clearer picture,” another Gulf source said.
Already running close to record highs of about 10 million bpd, Saudi says it has the capacity to reach 11.4-11.8 million very quickly and could bring on another 700,000 bpd in 90 days to reach full capacity of 12.5 million bpd.
4 Comments on "U.S. asks Saudis to lift oil output"
Plantagenet on Tue, 13th Mar 2012 5:26 pm
Obama can plead with the Saudis all he wants but it’s unlikely they have much more production capacity and even more unlikely they’d turn it on for Obama who they hold responsible for the downfall of their friend and ally Mubarak in Egypt
DC on Tue, 13th Mar 2012 7:46 pm
The intention behind this request could not be more clear. The aemrikans are looking to SA to cushsion them from feeling the economic effects back home if they decide to attack Iran over its non-existent nuclear weapons program. Of course, they feel if they managed to conquer Iran and install a puppet govt, ie the Shah Ver 2.0, that eventually the ‘cost’ will come back down anyhow. What they are really after is wanting SA to cover the external cost of expanding the empire for them. For SA to say they cant replace Iran 2.5mbd is more or less encurageing them to attack.
Wheither they actually can do this, is another question of course, but amerikans love being told what they want to hear, even if reality says otherwise. If they want that ability by June, that could be a sign they wish to wage war this summer. Well see. The amerikan corporate govt cant be so stupid to believe they will stop 100% of Irans exports through sanctions, they clearly seek to do it through force.
armageddon51 on Tue, 13th Mar 2012 9:07 pm
The Americans just realized that their sanctions are backfiring. They are pushing crude prices higher to the benefit of Iranians. Stupid mistake made by the US to please Israel and surely bad timing for the president. Now it will nice to see what the SA are capable of. Of course higher output means faster reservoir depletion and damages. Who knew that the sanctions will finally prove once for all the Peak Oil theory.
BillT on Wed, 14th Mar 2012 1:55 am
Empires can only exist if they have an enemy. When the USSR broke up, the Empire had to find a new enemy, and the ‘War on Drugs’ began, but it was not profitable enough. Then they discovered the ‘War on Terror’ that can last forever and profits soared. There will never be peace as long as the Empire can wage war. Oil is the fuel, and when it is gone or too expensive even for wars, THEN, if there is a world left, it will see peace…or maybe just food
riots.