Balancing Act: US asks Saudis to lift oil output

KUWAIT: 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 programme which the West says aims to develop a nuclear weapon. Already running close to record highs of about 10 million bpd, Saudi says it has the capacity to reach 11.4 to 11.8 million very quickly and could bring on another 700,000 barrels per day in 90 days to reach full capacity of 12.5 million barrels per day.

Published in The Express Tribune, March 14^th, 2012.