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Saudis plan to increase oil output
Jad Mouawad, International Herald Tribune
Saudi Arabia, the world’s biggest oil exporter, is planning to increase its output next month by about a half-million barrels a day, an increase of nearly 6 percent, according to analysts and oil traders briefed by Saudi officials.
The increase could raise Saudi output to a production level of 10 million barrels a day, which, if sustained, would be the highest ever by the kingdom.
The move was seen as a sign that the Saudis are becoming increasingly nervous about both the political and economic effects of high oil prices. In recent weeks, soaring fuel costs have incited demonstrations and protests from Italy to Indonesia.
Saudi Arabia is now pumping 9.45 million barrels a day, which is an increase of about 300,000 barrels from last month.
While they are reaping record profits, the Saudis are concerned that the record prices reached this month might eventually dampen global economic growth and lead to lower oil demand, as is already happening in the United States and other developed countries
(15 June 2008)
Saudi Arabia’s Leverage In Oil Market Is Sapped
Neil King Jr., Wall Street Journal
As Saudi Arabia prepares to host a summit of oil producers and consumers Sunday, it finds itself without its usual leverage over oil markets. Concerned about the long-term impact of soaring prices, Saudi Arabia is limited in its ability to do much about it.
The world’s largest oil supplier does have two blunt weapons in its arsenal if it wants to try to beat down soaring oil prices to assuage the growing outcry over pump prices in world capitals. It can open its spigots wider to put more crude on the market, and it can sharply discount that crude to get refineries to lap it up.
Industry insiders say that Saudi Arabia may employ exactly that double whammy in a bid to take the steam out of a market that has sent prices up more than 40% since the start of the year. They say that during Sunday’s summit in the coastal city of Jeddah, which Riyadh called to address the problem of soaring oil prices, Saudi officials will propose boosting production by at least several hundred thousand barrels a day.
(16 June 2008)
Saudi Arabia’s Crude Oil Reserves: Particulars or Propaganda?
ace, The Oil Drum
This post originally ran 4 MAR 08, but it seems with the recent discussions about Saudi Arabia and OPEC (for example these pieces by Jad Mouawad and Fatih Birol) that the information in this post, in addition to the over 20 very important and related posts by TOD researchers linked at the bottom of this post in summary, is quite important to the recent discourse.
Furthermore, on 22 JUN 08, Saudi Arabia’s Oil Minister Ali Al-Naimi will “convene a meeting of representatives of producer and consumer nations and firms operating in the production, export and trading of oil to discuss the jump in prices, its causes and how to deal with it objectively”. Kuwaiti oil analyst Kamel Al-Harami added that this meeting “is an opportunity for a transparent and clear dialogue between producers and consumers to collectively explore solutions to the world’s energy crisis, now and in the future”. Perhaps there is a chance that Saudi Arabia and other OPEC members will offer some transparency about their oil reserves to the world at this important meeting in one week’s time.
Executive Summary
1. Saudi Aramco has effectively used propaganda methods for at least the last fifteen years to convince many governments, corporations and individuals to believe their statements. However, Aramco’s statement that it is the world’s leading oil producer is now false as it now second after Russia since 2006. Nevertheless, Saudi Aramco’s repeated statement about remaining recoverable oil reserves being 260 billion barrels (Gb) is still generally accepted.
(15 June 2008)
Links and more at original.
SAUDI ARABIA: More oil flowing?
Jeffrey Fleishman, Los Angeles Times (journalist blog)
Pressure from the U.S. and fears that soaring energy prices are hurting the global economy are forcing Saudi Arabia to consider significantly boosting oil production.
The Saudis are contemplating a “sizable additional increase” in oil production, according to The Middle East Economic Survey. An announcement on possible measures to bring down prices that have reached nearly $140 a barrel is expected later this month when King Abdullah meets with oil producers and consumers in the Red Sea city of Jidda.
In May, the king rejected a request by President Bush to make more oil available, saying that markets should dictate production levels. But costs have since dramatically climbed. Saudi concerns of a global economic slowdown and fears that escalating prices would compel countries to develop alternative sources, which ultimately would hurt the kingdom, have led to a shift in Saudi thinking.
(14 June 2008)
Saudi oil: the foundation of geopolitical power (slideshow with audio)
Stratfor
With $130-a-barrel oil, Saudi Arabia has the financial power to change the geopolitical map in its favor. In this multimedia analysis, Stratfor explores that position, how it came about and what issues the kingdom faces today
(June 2008)
At the moment, these three short (less than 5 minutes) segments don’t seem to require a subscription. Some material on the Stratfor site seems to be public access, other is by subscription only.
The viewpoint seems to be RealPolitik, rather objective, though with a general Western viewpoint.
About Stratfor:
Stratfor is the world’s leading online publisher of geopolitical intelligence. Our global team of intelligence professionals provides our Members with insights into political, economic, and military developments to reduce risks, to identify opportunities, and to stay aware of happenings around the globe.
-BA
