Saudi Arabia is capable of providing additional oil production if needed to counter supply disruptions caused by unrest in the Middle East, James Smith, U.S. ambassador to the kingdom, said in an interview on InBusiness with Margaret Brennan.
“We do not see, either with a combination of Libya and Algeria, that there’ll be a break in the market such that the Saudis would not be able to offset that loss with their spare capacity,” Smith said.
Saudi Arabia has increased oil production by 1 million barrels a day and has the capacity to pump an additional 3.5 million barrels a day, Smith said.
Saudi production in February averaged 8.425 million barrels a day, according to a Bloomberg News survey of oil companies, countries and analysts. The kingdom’s capacity is an estimated 11.5 million barrels a day.
Crude oil for April delivery fell 64 cents, or 0.6 percent, to settle at $104.38 a barrel on the New York Mercantile Exchange. The contract touched $106.95 on March 7, the highest intraday price since Sept. 26, 2008, as civil strife spurred concern that production in the Middle East may be disrupted. Futures are up 28 percent from a year ago.
The U.S. doesn’t see any change in the stability of the kingdom, Smith said.
“Here in Saudi Arabia, there is an ongoing dialogue between the people and the al-Saud family,” he said.
Day of Rage
Postings on websites have called for a nationwide Saudi “Day of Rage” on March 11 and March 20, Human Rights Watch said on Feb. 28.
Regional unrest, which has so far toppled the leaders of Tunisia and Egypt, has reached Saudi Arabian neighbors Yemen, Oman and Bahrain, the island-kingdom where a Sunni family rules the majority Shiite population.
“The Saudis will look at what’s happening in Bahrain as a Bahraini domestic issue for them to deal with,” Smith said.