Saudi Arabia and the United Arab Emirates hold the bulk of the world’s spare oil capacity. With prices for oil surging, Saudi Arabia’s state run oil company, Saudi Aramco was asked if there was much oil to spare, and its answer was, essentially, “not much.” Reuters reports:
Global oil demand is growing healthily as economies recover from the pandemic and spare production capacity is declining, the CEO of Saudi Arabia’s state oil company Aramco said on Sunday.
Oil prices have surged to 14 year highs above $100 per barrel in recent weeks as Russia’s invasion of Ukraine prompted fears of supply disruptions, leading Western countries to urge producers such as Saudi Arabia to increase output.
“Global spare capacity is around 2 million barrels per day, which is not significant enough to deal with these geopolitical events and what is happening in the market,” Aramco (2222.SE) CEO Amin Nasser said in a media call after the company reported bumper 2021 results. read more
Nasser said he expected demand to return to pre-pandemic levels by the end of this year.
Asked whether Saudi Arabia would pump more oil to fill any gaps in the market left by the Ukraine conflict, Nasser said it would produce according to guidelines from the Saudi energy ministry.
“We will pump as long as we meet guidelines from the ministry with regards to levels of production,” he said.
Saudi Arabia, and to a lesser extent its Gulf neighbour the United Arab Emirates, hold the bulk of spare capacity in the OPEC group of producer countries.
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