Saudi Arabia says ready to pump more oil to balance market

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Saudi council of ministers hold weekly meeting, chaired by King Salman, in Riyadh. (SPA)
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Saudi council of ministers hold weekly meeting, chaired by King Salman, in Riyadh. (SPA)
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Saudi council of ministers hold weekly meeting, chaired by King Salman, in Riyadh. (SPA)
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Saudi council of ministers hold weekly meeting, chaired by King Salman, in Riyadh. (SPA)
Updated 03 July 2018
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Saudi Arabia says ready to pump more oil to balance market

  • Kingdom has been pumping around 10 million barrels per day
  • Saudi Arabia’s spare production capacity estimated to be around 2 million barrels per day

LONDON: Saudi Arabia has said it is ready to use its spare production capacity in order to help balance the global oil market, according to a Cabinet statement released on Tuesday. 

The Kingdom, which has been pumping around 10 million barrels per day, holds the largest spare capacity in the world and is the only country that can add substantial supply to the market.

“The Cabinet ... affirmed the Kingdom’s readiness to use its spare capacity when needed to deal with any future changes in oil supply and demand rates in coordination with other producing countries,” read a statement released by the Saudi Press Agency. 

The Cabinet statement follows the US President Donald Trump’s tweet on Saturday that said that Saudi Arabia had agreed to ramp up oil production to bring down global prices.

He tweeted the Kingdom could pump “maybe up to 2,000,000 barrels,” presumably meaning barrels a day. This increase is needed to cope with the “turmoil and dysfunction in Iran and Venezuela,” Trump tweeted.

Saudi Arabia’s spare production capacity is estimated to be around 2 million barrels per day. The Kingdom did not initially confirm Trump’s tweets and the White House at first backed away from the comments. 

Saudi Arabia’s announcement on Tuesday comes just over a week since OPEC and non-OPEC producers including Russia agreed to increase production by 1 million barrels per day from the start of this month. The move partly reversed the original OPEC+1 deal which came into force in January last year and was designed to reduce the global glut in oil. 

The planned production increase was intended to balance the market as global oil prices have been steadily rising, edging closer to $80 per barrel last month. Yet the announcement, on June 23, initially caused prices to rise. 

Trump’s plans to impose sanctions on Iran, coupled with low production from Venezuela and blockades on some ports in Libya have continued to tighten global supply, pushing up oil prices. 

Tuesday’s announcement could see prices start to decline, suggest some analysts. 

“Saudi Arabia’s readiness to utilize its spare production capacity which is estimated at 2 million barrels could spell trouble for oil bulls down the road,” Lukman Otunuga, research analyst at FXTM, told Arab News. 

“Although geopolitical risk factors ranging from suspended oil exports from Libya, falling production in Venezuela and US sanctions on Iran have supported oil, the oversupply concerns could make a return. 

“Investors should keep in mind that US shale production remains robust while global trade tensions present a threat for global growth, and this may translate to less demand for commodities. 

“If geopolitical risk factors impacting oil start to ease and demand declines on slowing growth, oil may witness heavy losses. The immediate reaction following the announcement has been negative, with WTI trading around $73.67 (on Tuesday afternoon).”

The UAE’s energy minister and current OPEC president for 2018, Suhail Al-Mazrouei, on Tuesday said that the UAE stood ready to help tackle any potential oil shortage, while underlining that OPEC will continue to adhere to “overall conformity levels” for the rest of 2018, according to Reuters report. 

“OPEC will, from July 1, strive to adhere to the overall conformity levels for the remaining duration of the Declaration of Cooperation,” he said in a statement cited by the news agency. 

* During the cabinet meeting, King Salman also said millions of visitors performed Umrah rituals during the holy month of Ramadan easily and comfortably, and expressed his appreciation to all governmental and private sector employees for their efforts.

In the same context, the cabinet praised the statement issued after the meeting held in Makkah on the economic crisis in Jordan, called for by King Salman. King Abdullah II of Jordan, Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, Emir of Kuwait, Sheikh Mohammed bin Rashid Al-Maktoum, Vice President, Prime Minister of the UAE and Ruler of Dubai attended the meeting. 

The Cabinet praised the statement issued after the meeting in Makkah on the economic crisis in Jordan. The UAE, Kuwait and Saudi Arabia agreed an aid package for Jordan of  $2.5 billion.

The Cabinet was briefed on Crown Prince Mohammed bin Salman’s visit to Russia.

The cabinet praised the Kingdom and the UAE’s adoption of a joint strategy for integration between the two countries economically, developmentally and militarily through 44 projects called “Resolve Strategy.”

The cabinet affirmed that the launch of the Saudi Project for Landmines Clearance in Yemen, carried out under the King Salman for Humanitarian Aid and Relief Center, is an extension of the history of the Kingdom, which has been providing aid where more than 600,000 landmines have been found, as well as 130,000 sea mines, and 40,000 mines in Marib governorate and 16,000 mines in Muen Island.

 


Pilgrims from all nationalities took part in Saudi National Day

Updated 22 min 35 sec ago
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Pilgrims from all nationalities took part in Saudi National Day

  • A number of pilgrims from various nationalities participated in a national initiative, organized by the Hadiya Association, in the holy cities of Makkah and Madinah
  • This is the first time that pilgrims, who have now finished their rituals and will leave on Sept. 25, have celebrated this special day with all of the people of Saudi Arabia

MAKKAH: Pilgrims from all nationalities took part in the celebrations to mark the 88th Saudi National Day, paying thanks to the Saudi government for the services provided to the two Holy Mosques.

After Saudi Arabia announced the success of this year’s Hajj season, the Umrah season kicked off. It also began to receive pilgrims from all nationalities, all of whom stressed that they cannot forget Saudi Arabia’s support in granting them their rights and helping them throughout their economic hardships.

“Every year I come to Saudi Arabia for Umrah. I am used to performing Umrah every year, but this year is special because it coincides with the National Saudi Day,” said Hamdi Abul-Enein, from Egypt, adding: “For the first time in my life I see the Saudi people celebrating their National Day, reflecting the cohesion between the citizens and their leadership. This is not surprising because we know the core of Saudi people are keen on the security and stability of the country.”

Hamdi added: “In Egypt, we share the joys of the Saudi people. For decades, there have been strong ties between Egyptians and our Saudi brothers. Sincere ties based on the Islamic religion joins us. Congratulations to Saudi Arabia and its citizens.”

Ali Al-Saradi, a pilgrim from Yemen, said: “I roamed the streets of Makkah and Medinah, and found people celebrating the national day. We admire the unity and loyalty of our Saudi brothers to their leadership. I am keen on sharing these celebrations with my Saudi brothers. In Yemen, we are happy for the Saudi citizens’ happiness. We consider them as our brothers and therefore we are happy for their joys and are sad for their sadness.”

Kuwaiti pilgrim, Abdullah Al-Ajami said: “This occasion is not only celebrated by the Saudi people, but also by all those who love this country. I can confirm that the rulers of this country are very generous and put all efforts to serve the two holy mosques. So it is no surprise to see so many nationalities celebrating the National Saudi Day.”

“The Saudi leadership and people stood with their Kuwaiti brothers during the brutal invasion; they opened their hearts before their homes. They were the first to work for the liberation of our country, and this is what strengthened the blood ties between us for decades. I ask God to perpetuate their joys,” he added.

The Hadiya Association involved pilgrims and visitors in celebrating the 88th National Day Festival.

A number of pilgrims from various nationalities participated in a national initiative, organized by the Hadiya Association, held during a reception and farewell for pilgrims, in the holy cities of Makkah and Madinah.

The Association distributed Saudi flags and gifts to the pilgrims. They received traditional Saudi hospitality and were given a presentation on the National Project, conducted in sign language in order to engage deaf people in the celebrations for the first time. The presentation, which was part of the Association’s project entitled “Nourishment of the Soul”, was conducted in 67 languages with the participation of both volunteers and multi-national students currently on scholarships in Saudi universities.

The Director General of the Association, Sheikh Mansoor Al Amer, expressed his joy seeing the pilgrims enthusiasm and willingness to engage in the celebrations for Saudi National Day, which commemorates the unification of the Kingdom of Saudi Arabia and expresses appreciation of the services provided by the Custodian of the Two Holy Mosques during their spiritual journey in Makkah, Madinah, and Al Mashaaer Al Mugaddassah.

This is the first time that pilgrims, who have now finished their rituals and will leave on Sept. 25, have celebrated this special day with all of the people of Saudi Arabia, in what has widely been seen as a practical application of the Kingdom’s new 2030 vision.

Sheikh Al Amer added that a number of volunteers from different fields were cooperating with the association. They have circulated a clip on social media showing the Saudi national anthem being translated into sign language. The anthem was produced in association with Saleh Bin Hamood Al Nefaie, a sign language translator for the Friday sermon, which is regularly broadcasted from the Holy Mosque in Makkah and aired on the Qur’an Channel.