Top oil exporter Saudi Arabia is pumping at around 10 million barrels per day (bpd), the most in about five months, and is storing 80 million barrels to meet any sudden disruption in supplies, Oil Minister Ali al-Naimi said on Tuesday.
Worries of a supply disruption from the Middle East due to escalating tensions between the West and Iran over its nuclear programme pushed Brent prices 20 per cent higher since the start of the year to a record of over $128 in March.
Prices have since eased but the more expensive crude has threatened to derail the fragile global economic recovery and strained the budgets of emerging economies, which has prompted Saudi Arabia to repeatedly stress that oil markets were well supplied.
Saudi Arabia pumped 10 million bpd of oil last month, Naimi said, which was the most since November when it produced more than it had done for decades.
The kingdom stood ready to tap into its spare capacity of 2.5 million barrels per day if more crude was needed, he added.
“In addition to our spare capacity of 2.5 million barrels per day, we have on the ground, in tanks and in pipelines about 80 million barrels of inventory, these are working inventory,” Naimi told reporters during a trip to Japan.
Saudi Arabia had storage capacity of about 80 million barrels, which is full, and is ready to meet any sudden need for an increase in supply, he added.
Iran’s oil exports have been reduced by Western sanctions aimed at forcing Tehran to halt its nuclear programme.
China, South Korea, Japan and India, the main buyers of Iran’s 2.2 million bpd of exports, have all made cuts in purchases this year and rising supplies from Saudi Arabia, Libya, Russia and other Middle Eastern exporters are helping ensure there is ample crude available.