Saudi Arabia can boost oil output after U.S. quits Iran deal, won’t act alone – OPEC

DUBAI, May 9: Saudi Arabia is monitoring the impact of the U.S. withdrawal from the Iran nuclear deal on oil supplies and is ready to offset any shortage but it will not act alone to fill in the gap, an OPEC source familiar with the kingdom’s oil thinking told Reuters.
On Tuesday, U.S. President Donald Trump abandoned a nuclear deal with Iran and announced the “highest level” of sanctions against the OPEC member. The original agreement had lifted sanctions in exchange for Tehran limiting its nuclear program.
“People shouldn’t take it for granted that Saudi Arabia will produce more oil single-handedly. We need to assess first the impact if there is any, in terms of disruption, in terms of a reduction of Iran’s production,” the OPEC source said on Wednesday.
“We have managed to put together this new alliance between OPEC and non-OPEC. Saudi Arabia will not in any way act independently of its partners.”
Riyadh is working closely with the United Arab Emirates (UAE), which holds the Organization of the Petroleum Exporting Countries’ presidency in 2018 and non-OPEC producer Russia for “coordination and market consultations,” the OPEC source said.
He added that any action will be taken in coordination with all OPEC and non-OPEC partners, if needed.
OPEC is in the midst of an oil supply-cutting deal with non-OPEC producers such as Russia that has helped erase a global glut and boost oil prices. The agreement is due to expire at the end of 2018.
Saudi Arabia, the world’s largest oil exporter and top OPEC producer, is concerned about any negative impact from the possible supply shortage on oil-consuming countries, the OPEC source said.
But Saudi Arabia has enough oil production capacity – currently at 12 million barrels per day (bpd) — to maintain oil market stability, the source added.
A key U.S. ally, Saudi Arabia welcomed Trump’s decision to withdraw from the nuclear agreement with Iran and to reimpose economic sanctions on its arch-foe. (Reuters)

Oman Observer

To get free breaking news and updates from Oman Observer, WhatsApp your name and email to 96473232.

observer has 3942 posts and counting.See all posts by observer