International Energy Agency says Gulf kingdom able to pump more oil to compensate
Saudi Arabia will be able to pump enough oil to compensate for any loss of Iranian output caused by Western sanctions, the head of the International Energy Agency (IEA) said on Friday.
"There is no fear of disruption of supplies and you know Saudi Arabia is going to bring more oil to the market," Maria van der Hoeven, the executive director of the agency that advises developed nations, said while attending an Asia Gas Partnership conference in New Delhi.
Brent crude prices have risen 15 percent since the beginning of the year to more than $123 a barrel amid concern that much of Iran's 2.5 million barrels a day of exports will be lost to the market because of European and US sanctions, which are aimed at punishing Iran for its nuclear programme.
Saudi Arabia, the biggest producer in the Organisation of the Petroleum Exporting Countries (OPEC), said on Tuesday it was ready to raise its output to 12.5 million barrels per day from current levels just below almost 10 million.
The IEA sees no need to release oil from the strategic reserves as yet, Van den Hoeven said, adding that currently there is "no serious disruption of supplies".
Crude prices may rise between 20 and 30 percent if Iranian supplies are taken off the market, Christine Lagarde, managing director of the International Monetary Fund, said this week.
In addition to the risk of the loss of Iranian exports, adverse weather, unplanned outages at fields and unrest in Syria, Yemen and Sudan have taken an estimated 1.1 million barrels per day of oil production offline, according to Reuters calculations.
World oil demand is expected to be around 89.9 million barrels a day in 2012, according to the IEA.