Saudi Arabia will not ‘immediately’ ramp up production to offset US sanctions on Iran – energy minister
Saudi Arabia today said it will not “immediately” increase oil production after toughened US sanctions on Iran threatened to drive down global supply.
Energy minister Khalid al-Falih said his country was not guided by global prices, which hit a 2019 record on Tuesday after the US ended exemptions from Iranian sanctions for eight countries which buy the country’s oil.
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“Inventories are actually continuing to rise despite what is happening in Venezuela and despite the tightening of sanctions on Iran. I don’t see the need to do anything immediately,” Falih said in Riyadh.
Earlier this year oil producing cartel Opec, which is de facto led by Saudi Arabia, started cutting its output after prices fell to nearly $50 per barrel.
The price of Brent crude has since recovered, and was trading fairly flat today at $74.30 per barrel.
“Our intent is to remain within our voluntary [Opec] production limit,” Falih said.
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He added: “We think there will be an uptick in real demand but certainly we are not going to be pre-emptive and increase production.”
Saudi’s production is expected hit 9.8m barrels per day in April, with exports projected at below 7m.