Top oil exporter Saudi Arabia is pumping around 10 million barrels per day (bpd) and is storing 80 million barrels to meet any sudden disruption in supplies, Oil Minister Ali Al Naimi said Tuesday.
Worries of a supply disruption from the Middle East due to escalating tensions between the West and Iran over Tehran's disputed nuclear programme have pushed Brent prices 20 per cent higher since the start of the year to a record of over $128 (Dh470) in March.
Prices have since eased but the more expensive crude has threatened to derail the fragile global economic recovery and strained the budgets of emerging economies. This has prompted influential Saudi Arabia, a key ally of the United States, to repeatedly stress that oil markets are well supplied.
Despite the recent declines, Al Naimi told reporters during a trip to Japan that oil prices were still high. Asked if producer group Opec needed to raise output quotas in a policy meeting on June 14, he said: "You have to wait for the meeting. We have to discuss that."
At 10 million bpd, Saudi Arabia's output is the same as last month, which was the most since November when it produced more than it had done for decades.
The kingdom stood ready to tap into its spare capacity of 2.5 million barrels per day if more crude was needed, he added.
"In addition to our spare capacity of 2.5 million barrels per day, we have on the ground, in tanks and in pipelines, about 80 million barrels of inventory. These are working inventory," Al Naimi said.
Saudi Arabia had storage capacity of about 80 million barrels, which was full, and was ready to meet any sudden need for an increase in supply, he added.
Iran's oil exports have been reduced by Western sanctions aimed at forcing Tehran to halt its nuclear programme.
China, South Korea, Japan and India, the main buyers of Iran's 2.2 million bpd of exports, have all made cuts in purchases this year and rising supplies from Saudi Arabia, Libya, Russia and other Middle Eastern exporters are helping ensure there is ample crude available.
Saudi Oil Minister Ali Al Naimi told Japanese Trade Minister Yukio Edano that Japan was an important consumer and customer, and that he understood the country's oil needs had increased following the Fukushima nuclear disaster, according to a Ministry of Economy, Trade and Industry (Meti) official who briefed reporters on the meeting.
The last of Japan's nuclear reactors was idled on Saturday with no schedule for restarts because of concerns about safety.
Al Naimi said Japan could rely on Saudi Arabia for stable oil supplies. But the Meti official said that no specific country was mentioned when reporters asked if Saudi Arabia would step in to fill the shortfall from Iran.
"This offer of supply from Saudi Arabia is not to offset a particular nation's decline in exports to Japan," the official said. "There was no such exchange."