Finance

Saudi ready to boost oil output, spare capacity: minister

Saudi ready to boost oil output, spare capacity: minister

RIYADH: 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.

The kingdom, which produces more than a tenth of global supplies, had vowed on Monday not to withhold its output as a political weapon amid the worldwide backlash over the murder of journalist Jamal Khashoggi.

He added there is NO guarantee that oil prices would not go higher once anti-Iran sanctions come into force next month. "As I have said many times, there is no replacement for Iranian oil in the market", he said.

In addition to its crude investments, Saudi Arabia intends to partner in liquefied natural gas projects overseas and start trading LNG in the future. "But Saudi Arabia is a very responsible country, for decades we used our oil policy as (a) responsible economic tool and isolated it from politics", al-Falih said. Shipping brokerage Eastport said crude prices were "expected to decline in coming months, as rising production in the USA offsets increasing global demand".

US light crude dropped $3.03, or 4.4 percent, to $66.33 a barrel, after earlier hitting a two-month low at $65.74.

Despite this, Sukrit Vijayakar, director of energy consultancy Trifecta, said "markets are. tired of the impact of USA sanctions on Iran's oil sector", estimating the sanctions "could impact up to 1.5 million barrels per day of supply".

US Treasury Secretary Steven Mnuchin on Sunday dismissed concerns that oil prices could rise, saying the market had already factored in the loss of Iranian oil.

"The weekly inventory data is unlikely to provide any respite, with a fifth consecutive build expected to United States oil inventories", said Matt Smith, director of commodity research at ClipperData. "That policy has been consistent for many years", Falih said. "Then we'll have a clearer picture of what to expect for the first quarter of next year", Varga said.

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher early Monday.

India can probably do without importing Iranian crude oil, the chairman of a Switzerland-based think tank told Times of India on Tuesday, but warned that the trade wars and tariffs are more worrisome for India's economy.

"As long as America targets Iran, one of the biggest crude producers, with sanctions, the volatility in the oil market will continue", Zageneh said.