Wednesday, August 10, 2011

Saudi Arabia Pushing Oil Production to 10 Million bpd

The International Energy Agency (IAE) reported on Wednesday that Saudi Arabia is significantly increasing its daily oil production, reaching 9.8 million bpd in July, the highest production level for the country in 30 years [Gulf Times, 9 August].

OPEC countries also increased their output in July, reaching 30.5 million bpd as compared to 29.9 million bpd in June. With the exception of Iran, OPEC members have exceeded their quotas this year. OPEC provides 40% of the world’s crude.

In its monthly oil market report, the Paris-based IAE said the oil output has regained levels close to pre-Libyan levels, but still below what the market demands.


Anonymous said...

A psyco information campaign to keep prices and the market on a leash.

KSA cannot produce so much... not because they can't technically ..but because the Oils is simply not there.

A quarter of Saudi Oil production is lame due to the lack of it !

But OK play your games...

Gifted one said...

haha..the Saudi pimpdom should pump away! They certainly need the extra money to bribe their subjects, and fund the counter-revolution.

Nader Uskowi said...

Anon 4:44 AM,

We cannot accept or reject these types of reports based on our political preferences. IMF report on Iran is OK but IAE report on Saudi is false. The reality is that Iran and Saudis are the originators of data that these reports are based on. With a caveat that oil production statistics are much more easily verifiable than the GDP stats.

If you know of any data/report showing Saudis have not increased their production to a level not seen since 1981, please share it with us. That would be very important in analyzing the future trends of oil prices.

Gifted One’s analysis sounds much more plausible.

Anonymous said...

What will the house of Saud do when(not IF) the oil runs out or not enough in the ground to be pumped?

Pumping oil to buy $60 BILLION worth of weapons to keep in the desert, not to mention American technicians that will be handling the. Pumping oil to buy political favors in the Washington and Brussels and also bribe their feudal tribal base to stay in line.

Is anyone getting my drift?

Iraq will in about 10 years time be more relevant to the empire than the house of Saud as they have a lot more oil.

There's nothing to panic about for Iran. Iran's oil needs better management. An ever dwindling resource like oil only needs to be tightly controlled. If the al Sauds want to use their oil to play dice(geopolitical games), that's theirs and so be it. Not ours!!!

Anonymous said...

Dear Nader..What will the Iranian regime do when the price of oil goes down and their subsidy payment program takes a knock but also taking its toll on the economic development and social welfare programs?
Also the private manufacturing sector is over 50 per cent idle according to regime sources which also reflects upon the state sector.Lastly by flooding the country with cheap Chinese products at the expense of making Iranian products less competitive leading to the Iranian work force being made redundant is a ticking time bomb.

Nader Uskowi said...

I don’t quite get it: discussion was not about the future of the House of Saud. It is about Saudis increasing their oil output to nearly 10M bpd. The argument was that this is a lie, and Saudis cannot possibly produce that much. The question was if there were any hard data/report discounting the Saudi production level. It is important to know how much they are producing in order to analyze its impact on the world’s oil market, which would affect Iran among others.

Anonymous said...

What ever the case is Saudi can produce much more oil than Iran what is there to know?
We also know if done it can cause trouble for Iran.
We also know that Saudi is the Tool of the west.Whats new here they where used by the west in the late 1970s as well.

Anonymous said...

here is why

Nader Uskowi said...

Anon 9:04 AM

My last comment obviously was not directed at you but for Anon 7:31 AM. In any case, you have brought up a very important issue. The success of the subsidy reforms, which by the way I fully support, will depend on the price of oil. The price can go down for a short period, but if the global slowdown causes a longer-term price decline, then the subsidy removal program will be in deep trouble, because the monthly cash payouts in the tune of some $2.4 billion a month is key to the program's success, and without oil at high prices of recent months, those payments will not be feasible, and without those payments the people would not be able to cope with the rising prices of essential goods and services.

Needless to say, the damage will not be limited to subsidy reform program and would badly affect the investment in the oil industry itself and other development projects.

Nader Uskowi said...

Anon 11:50 AM,

Thanks much for the link. Very interesting read. However, please not the subject of the cable was Saudi reserves, and not production levels. It's much tougher to fudge (especially by that much) the daily production levels. So many different channels monitor the sale of crude in international markets and presumably the Saudi push to increase their output is for increased exports, and that would be noticed almost immediately.

Anonymous said...

The Saudis have the world's largest proven reserves of oil (twice as much as Iran)

and has a capacity to pump out 12.5 million bpd.

they've pumped 10 million per day before and they can go on pumping this much for a long, long time.

some months back, they said that they were going to ramp it up, and they may decide on further increase.

Anonymous said...

I don't have the facts but all I can say is that it's impossible..The Saudis are just lying.

There's enough oil on the world market so pumping any more oil not only doesn't make sense but very stupid,in my opinion.

anon 2:35 PM, with all due respect,please don't use wikipedia as a source of credible information.Unless you're a lazy college student who just like doing copy-paste research.

Anonymous said...

with all due respect, the figures on proven Saudi reserves come from OPEC and are matched by several other sources.
so whether I use the chart put up in wkipedia or not doesn't matter in this's information is credibly sourced.

unlike that of your claim that it's impossible for the Saudis to pump at a rate that they were able to sustain 30 years ago, after the iranian revolution.

it's very obviously not impossible.

it's also unclear why you can claim that there's enough oil on the world market without the extra Saudi output.

the "extra" Saudi oil is being bought up and the price hasn't dropped you're very clearly not correct about that claim, either.

(did you forget that Libyan oil isn't reaching market?)

I expect that the Saudis are going to keep pumping in expectation of keeping the price from rising...and maybe enough increase their output if they wish to push the price down.they issued a public warning to Iran that they would depress Iranian oil earnings if the Iranians didn't cease expansionist and (to the Saudi pov) subversive activities in the Gulf States and elsewhere in the ME.

Anonymous said...

"they issued a public warning to Iran that they would depress Iranian oil earnings if the Iranians didn't cease expansionist and (to the Saudi pov) subversive activities in the Gulf States and elsewhere in the ME."

If they're pumping more oil because of Iran "subversive" activities in the Gulf States, then it's a sure war of dwindling their own resources..The Saudis are busily fighting Iranian shadows in Bahrain and this is costing Iran nothing.It's not Iran that's invaded Bahrain or meddling in Yemen. Go to any of these two countries and their hatred for the Saudis run deep.Unless the Saudis want to buy them all off as well as they usually do - y'know, throwing more money at the problem...

Iran's budget is based on oil at $70, if I'm not mistaken - someone please correct me if I'm wrong and thanks in advance. If the Saudi idea is to bankrupt Iran, then I think they've failed miserably because oil is still not below $90 as we speak.It's been hovering about $90 - $110 a barrel..And who says pumping more oil means prices will go down? Oil prices are determined by speculators in NY and London regardless of how much oil is on the market..

Maybe they should also buy off all the speculators as well while they're it...

Rd. said...

Nader Uskowi said...
“Saudi reserves,”

Tighther oil supplies for 2012 and Saudi reserves;;;

“IEA's move

, the shortfall isn't going to make any significant changes to the oil supply. From a short term perspective, this move would help lower the price of oil. (The news did ease the oil price, since regained. ) However, in the long term, the reserves have to be replaced, and if the demand rises, this short term measure will push up oil prices. “

Anonymous said...

---" If they're pumping more oil because of Iran "subversive" activities in the Gulf States, then it's a sure war of dwindling their own resources."---

Any and all sales of oil is a "dwindling" of resources in exchange for money, of course but the Saudis have 130 billion more barrels of proven reserves than Iran.

That's more than 35 years worth @10 million bpd.

They don't have to bankrupt Iran, they merely have to keep the price down enough to insure that iran doesn't rake in a surplus large enough to cover development for the country and social welfare programs for the citizenry AS WELL AS all the costs of Iran's expansionist schemes and interference in the Arab nations and elsewhere.

The Iranian regime is going to put their citizens last on the list and erode domestic support even further or it's going to cut back on adventurism...either choice suits the Saudis.

Anonymous said...

Anon 12:29 PM
I agree with you on this.

Anonymous said...

I have recently read a report by a regional research house that claims $ 85 a barrel is the price at which Saudi's budget breaks even. Anything above $ 85 pb is a surplus. Conservatively, if we asume that Oil prices will average $ 90 a barrel in 2011, with 8.5 million bpd, you can only imagine the surplus of Saudi.

In addition to this, Saudi's debt is only 10% of GDP and foriegn reserves are increasing significantly, I believe that the country is in peak times and this state will continue for years to come.

under this context, Saudi is attempting to counter the Irani threat at all costs. The Saudi government has been more active politically in the region as it ever been. Its quick involvement in Bahrain and yemen, allowing Jorden to join GCC, and ptentially financing a turkish lead attack on the Pro Irani Syrian regim are all examples. All of which wil be taken from the above mentioned surplus.