Top oil exporter Saudi Arabia is determined to bring down high oil prices and is working with fellow Opec members to accomplish that, Oil Minister Ali Al Naimi said on Friday.
Brent crude has risen about 13 per cent this year, trading above $120 a barrel on Friday, threatening a nascent recovery of the global economy. Oil has traded above $100 for all but a couple of days in the past year.
“We are seeing a prolonged period of high oil prices,” Naimi said in a statement during a visit to Seoul. “We are not happy about it. (The Kingdom of Saudi Arabia) is determined to see a lower price and is working towards that goal.”
The Saudi oil minister earlier this year identified $100 a barrel as an ideal price for producers and consumers earlier this year.
Concern of a supply shortage due to production problems in some producing countries and as US and European sanctions target exports from Opec’s second-largest producer Iran have helped keep Brent crude well above that mark.
Naimi reiterated that there were no supply shortages in the global oil market and the kingdom stood ready to tap into its spare capacity of 12.5 million barrels per day if more crude was needed.
“The story is one of plenty,” he said. “Supply is not the problem.”
Saudi Arabia is pumping 10 million barrels per day, the highest level since November, when the kingdom produced more than it had done for decades.
Fellow Opec producers Libya, Iraq and Angola have increased output, Naimi said. Non-Opec members including Canada, the United States and Russia had also boosted supplies, he added.
Saudi stockpiles at home and abroad were full, he added. Inventories in industrialised countries were also filling up, he said.
“Fundamentally the market remains balanced — there is no lack of supply,” he said. “Saudi Arabia has invested a great deal to sustain its capacity, and it will use spare production capacity to supply the oil market with any additional required volumes.”
The International Energy Agency said on Thursday that the oil market had broken a two-year cycle of tightening supply conditions as demand growth weakens and top exporter Saudi Arabia increases output.