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Saudi Arabia Has No Plans to Repeat 1973 Oil Crisis

24 October, 2018, 19:16 | Author: Melinda Barton
  • Oil rises above $80, Saudi Arabia plans output increase

Earlier today, Saudi Arabia's Energy Minister Khalid Al-Falih said that it was possible for their output to increase by 1-2 million barrels per day and added that they were ready to meet the market demand if Iran's oil exports were to shrink due to the US sanctions. "Investors will be watching closely to see if the increase in Saudi Arabia's output materializes quickly", Gene McGillian, vice president of market research for Tradition Energy in Stamford, Connecticut, told Reuters.

In addition, the Saudi stock market has continued to incur "severe" losses for the second week in a raw.

United States protection has allowed Saudi Arabia to carry out bombings against civilians in Yemen's war, Rouhani said, according to IRNA.

Crude futures have already come under pressure after forecasters like OPEC and the International Energy Agency knocked down their projections for global oil demand growth.

In terms of energy, Falih said: "The energy sector has witnessed excessive investment at the beginning of this decade and this is what led to disruption hence requiring OPEC's (particularly Saudi Arabia's and Russia's) intervention and firm cooperation, and we've succeeded in regaining trust in how the future of the oil industry will be".

U.S. sanctions on Iran's oil sector start on Nov 4 and analysts believe anything up to 1.5 million bpd in supply could be at risk.

Oil edged above US$80 a barrel on Monday, lifted by nervousness over a worsening diplomatic crisis between Saudi Arabia and the West, just two weeks before U.S. sanctions potentially choke off Iranian crude supplies.

"We will meet any demand that materializes", Al-Falih said at the country's signature investment conference, which is being overshadowed by an worldwide outcry over the killing of Saudi government critic Jamal Khashoggi.

Saudi Arabia said Monday it had no plans to repeat its harsh 1973 oil embargo, even as relations with the West sour following the killing of Saudi critic Jamal Khashoggi.

"Saudi and Russian oil production is now close to its highest historical level, and the two countries have no additional capacity to produce more and replace Iran's oil", he added. "As I have said many times, there is no replacement for Iranian oil in the market", he said.

Zanganeh noted that higher oil prices would strongly affect the global economy.

The minister said Saudi Arabia had in fact used its inventories to release about 500,000 barrels per day (bpd) of more oil to the market between May and September.


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