Saudi Faces Rising Oil Demand

Saudi Arabia’s main concern is to keep the global oil market well supplied, its deputy oil minister said on Thursday, as top Asian crude buyers look to the world’s biggest producer to step up output to make up for cuts in supplies from Iran.

Abdul Aziz Bin Salman bin Abdulaziz, in New Delhi on an official visit, said his country’s current spare capacity was 2.5 million barrels per day (bpd), while production now was at 9.8 million bpd.

India has sought an additional 100,000 bpd from Saudi Arabia for 2012/13, the Indian junior oil minister said on Thursday. The Kingdom is India’s biggest oil supplier.

Saudi Arabia is the only oil producer with significant spare capacity to replace any fall in supply from its regional rival Iran, which is facing Western sanctions aimed at crippling its contentious nuclear programme.

While India has said it will not implement the sanctions, it, along with China and Japan, are planning cuts of at least 10 per cent in Iranian crude imports as US measures make it difficult for the top Asian buyers to keep doing business with the OPEC producer.