• 3 minutes Shale Oil Fiasco
  • 7 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 12 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 16 minutes Global Debt Worries. How Will This End?
  • 8 hours DUMB IT DOWN-IMPEACHMENT
  • 11 hours Greta named Time Magazine "Person of the Year"
  • 56 mins POTUS Trump signs the HK Bill
  • 6 hours Everything you think you know about economics is WRONG!
  • 15 mins Tories on course to win majority
  • 1 hour americavchina.com
  • 24 mins Winter Storms Hitting Continental US
  • 16 hours Forget The Hype, Aramco Shares May be Valued At Zero Next Year
  • 3 hours WTO is effectively neutered. Trump *already* won the trade war against China and WTO is helpless to intervene
  • 1 day Can Renewable Natural Gas Compete With Diesel?
  • 16 hours Aramco Raises $25.6B in World's Biggest IPO

How Much Spare Capacity Does Saudi Arabia Really Have?

Saudi Oil

Saudi Arabia has pledged to cover any supply gap that may emerge as Iranian oil goes offline, but how much spare capacity does it really have?

The massive reserve of spare capacity located in the Saudi desert is the stuff of legend, taken as gospel in the world of oil. After all, Saudi Arabia is the only country in the world that can ramp up or down millions of barrels of production on short notice. And the Saudis have never let us down. 

But Saudi Arabia’s mythical spare capacity may finally be tested. Saudi officials insist that they can produce up to between 12.0 and 12.5 million barrels per day (mb/d) if needed. With output at about 10.4 mb/d in August, the latest month for which data is available, that suggests that they have around 1.5 to 2 mb/d of spare capacity. 

Not everyone buys that figure. Indeed, the precise amount of spare capacity has been the subject of much debate for years and even decades. Now, because Iranian supply is going offline at a rapid clip, the world may soon find out if Saudi Arabia’s confidence is backed up by reality or if it has all been a bunch of bluster. 

The EIA says that total OPEC spare capacity is set to average 1.49 mb/d in the fourth quarter, which is rather low by historical standards. The EIA sees OPEC spare capacity falling to 1.19 mb/d by the fourth quarter of 2019. 

There are a few times in the relatively recent past when spare capacity was that low, including two years…




Oilprice - The No. 1 Source for Oil & Energy News