Saudi: OPEC Ready to Boost Crude Production to Maintain Balance in Global Oil Market
Saudi Ready to Boost Crude Production to Maintain Balance in Global Oil Market (Representational Image/ Photo Credit: Pixabay)

Riyadh, October 23: Saudi Energy Minister Khalid al-Falih said on Tuesday the OPEC kingpin was ready to boost its crude production and spare capacity to help maintain a balance in the global oil market.

Speaking at an investment conference in Riyadh, Falih also said OPEC and non-OPEC producers are expected to sign in December an "open-ended" agreement to continue cooperation in the energy markets.

"I dont rule out that the kingdom's production which has been 9-10 (million barrels per day) over the last decade or so will be a million to two millions (barrels) higher," Falih said, without providing a time frame.

Saudi Arabia has already boosted its daily output to well over 10.5 million bpd to meet rising demand in the wake of several production disruptions in other countries. Donald Trump Tells OPEC to Lower Crude Oil Prices, Even As Iran Sanctions Loom.

The kingdom currently holds the biggest spare capacity of around two million barrels which can be utilised when required. "Investing in the capacity and producing the capacity will continue to be done," Falih said despite complaining of the high cost of raising and sustaining such capacity.

The Saudi minister expected demand for oil, which currently stands at around 100 million bpd, to rise to 120 million bpd over the next three decades. Falih said that around 25 producing countries from OPEC and non-OPEC are expected to sign in December a long-term cooperation agreement following the success of their coordination that helped boost prices.

"What we are hoping to do is to ink an agreement amongst at least the 25 (producers) that are signatories to the current agreement. Hopefully more countries will join," he said.

"It will become an open-ended agreement to continue to monitor and work together to stabilise the markets. This is the objective of the agreement: monitor and stabilise," he said.

Falih said he believes the oil market is "in a good place today in terms of supply and demand balances and inventories" after lifting restrictions on output in June.

OPEC and non-OPEC producers, including the world's top producer Russia, agreed in November 2016 to cut production to deal with huge inventories that sent prices crashing.

Since that agreement, oil prices have more than doubled and were currently hovering at just under USD 80 a barrel. Falih said the oil producers will continue to monitor supply and demand in the market especially with the Iran sanctions looming and would be ready to act if needed.