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Venezuelan Ambassador: Saudis Don’t Have Enough Spare Capacity

Despite its supposed promise to the United States to ramp up its oil production in the face of a tightening oil market, Saudi Arabia does not have the capability to ramp up its oil production to the tune of 2 million barrels per day, according to Venezuela’s Ambassador to Iran, Gregorio Gonzalez, in a statement to MEHR News Agency on Friday.

Saudi Arabia had assured President Donald Trump in early July that it could raise oil production if necessary, stating that it had sufficient spare capacity to bring online an additional 2 million barrels per day. The Kingdom’s promise followed a series of Tweets by President Trump that chastised the cartel for underproducing and manipulating oil prices.

Saudi Arabia’s promise to President Trump to lift production was not well received by all members of the cartel, particularly Iran. Today, Venezuela chimed in on Saudi Arabia’s planned production hike as well.

“It definitely violates the [OPEC] rules, but the problem is they are not able at all to produce that much oil; Saudi Arabia pledges to OPEC, but does not have the potential and capacity to keep this promise,” Gonzalez said today.

Related: China Just Doubled Oil Shipments To North Korea

A disgruntled Gonzalez went on to say that Saudi Arabia can only produce as much oil as they do because they have fewer “problems with the United States”—a sentiment that is not surprising coming from Venezuela, who, along with Iran, has been the target of US sanctions.

Whether Venezuela truly has direct knowledge of Saudi Arabia’s capacity is unknown, but the question of Saudi Arabia’s excess capacity—if any at all—has left many analysts and traders wondering just how much oil Saudi Arabia can actually produce, worried that OPEC will not be able to offset the production loss of Venezuela and Iran.

By Julianne Geiger for Oilprice.com

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  • Tom Blazek on July 23 2018 said:
    Dear Mr. President Trump, how about lifting the “SANCTIONS” YOUR EPA has on AMERICAN FARMERS and AMERICAN ETHANOL?

    Each summer YOUR EPA BLOCKS THE SALE OF Ethanol Blended E-15 fuel over a fictious RVP concern, from June 1 through September 15th. This “SANCTION” occurs in spite of the FACT that E-15 Fuel has a LOWER Reed Vapor Pressure (RVP) than E-10 has, which is allow for sale year-round BY CONGRESSIONAL LAW.

    So, was it Congress’s Intent to BLOCK a cleaner burning, LOWER RVP, and lower priced Fuels for sale during the Summer Months, or is this YOUR EPA’S and Administration’s Intent?

    I read articles that we are importing Saudi Arabian Gasoline and Russian Crude Oil on to the East Coast this summer, but we won’t allow American E-15 Blended Fuels.

    So why do YOU HAVE SANCTIONS on AMERICAN FARMERS AND AMERICAN ETHANOL Mr. President?

    I would Sure Like to Know.
  • Texas on July 21 2018 said:
    USA has 2 million bbl/day spare capacity. Need more pipe.

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