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Page added on February 26, 2012

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Saudi Arabia raises crude oil output

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As crude oil prices reached a nine-month high on concerns about Iran’s nuclear program, Saudi Arabia has increased its crude exports, and the U.S. is pondering releasing oil from its Strategic Petroleum Reserve, according to media reports Saturday.

Saudi Arabia, the world’s biggest oil exporter, has increased production in the past week and offered additional output to its largest customers to contain prices, Reuters reported.

The kingdom has said publicly that it would increase its output to cover any shortfall to the world supply from Iranian exports, Reuters reported.

Is there an upside to skyrocketing gas prices? SmartMoney’s Quentin Fottrell makes his case.

The newswire, citing unnamed industry sources, said that Saudi Arabia had increased exports to just over 9 million barrels a day last week, compared with an average of about 7.5 million in January. Reuters said it wasn’t clear if the export numbers were the start of a longer Saudi supply addition or a temporary move.

Crude-oil prices rose to more than $125 a barrel after the United Nations’ nuclear watchdog flagged the potential military threat of Iran’s nuclear program, Reuters said, adding the U.N. aborted an inspection mission to Iran this week.

Iran’s customers in Europe and Asia have already curbed their buying from the world’s fifth-largest crude exporter because of U.S. sanctions on Iran’s oil buyers, as well as a European Union oil embargo to begin July 1, Reuters reported.

According to AAA, average U.S. regular gasoline prices had risen to $3.674 a gallon as of Saturday. The average was $3.38 a month ago and $3.29 a year ago.

U.S. Treasury Secretary Timothy Geithner.

Treasury Secretary Timothy Geithner said on CNBC television on Friday that an improving economy and Iran “saber-rattling” were behind the recent rise in oil prices.

He said the administration would continue to look at tapping the strategic petroleum reserve but emphasized there’s “no quick fix,” language President Barack Obama used in a key speech on Thursday. Geithner also said the White House was looking to ensure alternative supplies from Saudi Arabia if needed. See Obama’s weekend speech on oil and energy.

Europe, which imports about 700,000 barrels per day from Iran, would suffer more directly from the cutoff of Iranian crude than would the U.S., which doesn’t buy oil from Tehran. But the knock-on effect of a disruption would drive prices higher around the globe, Reuters reported.

The U.S. Strategic Petroleum Reserve has enough capacity to cover U.S. needs for about 40 days, Reuters reported, adding the government most recently tapped into the reserve after Libya’s civil war


5 Comments on "Saudi Arabia raises crude oil output"

  1. BillT on Sun, 26th Feb 2012 3:28 pm 

    And when the cheaply bought ‘reserves’ are gone and we have to refill them with $200 oil, what then?
    When gas is $7 per gallon and rationed? When heating oil costs $2,000 to fill the tank in your basement, if you can get it? What then?

    And Saudi Arabia has not increased their real output in years. Why now?

    And if it cannot get it out of the Gulf, what then?

    And if this is the straw that breaks the world economy, what then?

    North Korea has nukes.(illegally)
    Pakistan has nukes.
    India has nukes.
    China has nukes.
    Russia has nukes.
    Israel has nukes (illegally)
    Maybe the Saudis have nukes supplied by the US.
    So what? In 10 years any country that wants nukes will have them. And then what?
    Ant answers?

  2. JohnRM on Sun, 26th Feb 2012 8:21 pm 

    You can just imagine the kind of calamity going on behind the scenes with discussions about what to do with Iran and oil prices. If anyone attacks them, they’ll skyrocket, but even without attacking, they’re skyrocketing. They know that high prices are going to retard growth and are seemingly powerless to stop that. This is really it. We’ve talked about it for so many years and now it has come. The water is finally about to boil. How many frogs are still left in the pot?

  3. PETE on Sun, 26th Feb 2012 11:20 pm 

    If I was Putin, right now I would be thinking about having a pipeline coming out of a large field owned by TNK-BP or some other large western companies, suddenly blow up and blame it on terrorist, then take their sweet time repairing and giving the go ahead to turn it back on.
    The spike in prices will more than offset the production loss and make the Euros think twice about Iran. Also a sweet Force Majoure ? excuse on delivery contracts.

  4. nimigje on Sat, 3rd Mar 2012 11:23 pm 

    The supply/demand equation has arrived a point, that the world future developement requires the oil exporters countries and the oil importers countries, co-operate for a better future,a better tomorrow. The interest of every country is developement and the peace.
    Work for the peace, for a better world.
    Work for a world withuot nuke. Work for non-renwables energy sources and work for renwables. Have job for everybody.

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