“There is no intention” in Saudi Arabia of imposing a 1973-style oil embargo on the West, Energy Minister Khalid al-Falih told TASS in an interview in response to a question citing predictions that the Kingdom may cut its supply of crude for global markets by half a million barrels daily because of the tensions that arose following the disappearance and death of dissident journalist Jamal Khashoggi.
“Our government through political channels is addressing this issue. But Saudi Arabia is a very responsible country, for decades we used our oil policy as responsible economic tool and isolated it from politics. So lets hope that the world would deal with the political crisis, including the one with Saudi citizen in Turkey, with wisdom,” Falih told TASS.
Khashoggi’s disappearance and the subsequent statement from Riyadh that he had indeed died at the Saudi consulate in Istanbul pitted the two allies, the United States and Saudi Arabia against each other, with several U.S. lawmakers insisting on penalties against Riyadh. Earlier this month some called for sanctions against Saudi Arabia, which prompted a response along the same lines, with an unnamed government official from Riyadh telling Saudi media that they will respond to any sanctions with “bigger measures.”
Naturally, everyone’s first thought in this context would be of the 1973 Arab oil embargo that followed Israel’s victory in yet another war and that unveiled the West’s heavy dependence on Middle Eastern oil.
As for the worry around global supply, after an internal OPEC document seen by Reuters revealed the cartel is finding it hard to boost production quickly enough, Falih said Saudi Arabia will soon hit the 11 million bpd mark and could raise it further to 12 million bpd, but that would be the maximum. “We have relatively limited spare capacities and we are using a significant part of them,” the official said.
By Irina Slav for Oilprice.com
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