Saudi Aramco CEO Says Company Ready to Make Up for Any Oil Market Shortage
Saudi Aramco, the world’s largest state oil company, is ready to compensate for any shortfall in crude supply, Chief Executive Officer Khalid Al-Falih said, as oil prices rally on potential shortages from Libya.
Saudi Arabian Oil Minister Ali al-Naimi said on Feb. 22 that his country and other OPEC members would make up for any production losses. The International Energy Agency said in a Feb. 25 statement that Saudi Arabia has been offering extra crude supplies to offset lost Libyan barrels.
“We’re ready to supply incremental change in demand from our customers,” Al-Falih told reporters in the eastern Saudi city of Khobar, when asked if Aramco would increase its production to meet a gap in supply. He declined to specify the amount of additional oil Aramco would provide. “The customer demand varies from day to day, so it’s hard to tell by how much we will raise the output.”
More than half of Libya’s crude output of 1.6 million barrels a day has been halted, according to the Paris-based IEA. The North African nation has been convulsed by an uprising against the government of Muammar Qaddafi, who has vowed to crush rebels threatening his 42-year rule, sending North Sea Brent crude futures as high as $119.79 a barrel last week.
The turmoil follows protests that led to the ouster last month of Tunisia’s president and the Feb. 11 fall of Egyptian President Hosni Mubarak and has put the Organization of Petroleum Exporting Countries under pressure to ensure that adequate quantities of crude reach the market.
Any Customer With Needs
“Any customer with an additional incremental needs has got it,” Al-Falih said. “You can verify that with customers.”
Aramco usually decides near the middle of each month how much it will supply to its term customers the following month.
Saudi Arabia is the Middle East’s largest crude exporter, and produced about 8.4 million barrels per day last month, according to Bloomberg News estimates. OPEC collectively pumped 29.4 million barrels a day in January.
Libya holds the largest oil reserves in Africa and is the continent’s third-largest producer after Nigeria and Angola.
High-quality West African OPEC crude that goes to Asian markets can be redirected to Europe, and extra Saudi oil can go to Asia to replace Nigerian or Angolan supplies, a Saudi Arabian oil official said in a telephone interview on Feb. 24, declining to be identified by name.
To contact the reporter on this story: Wael Mahdi in Cairo at wmahdi@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
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