“Saudi and other Gulf countries said to the world that they will meet demand if demand is there,” Maria van der Hoeven, IEA executive director, said yesterday on the sidelines of a conference in New Delhi. “They are reliable suppliers.”
The Paris-based agency coordinated the release of 60 million barrels of crude and oil products in June after Libyan output was disrupted by the uprising against Muammar Gaddafi, sending prices higher. The IEA also made supplies available during the 1991 Gulf War and after Hurricane Katrina struck rigs and refineries in the Gulf of Mexico in 2005.
Another release of strategic reserves is not warranted at the moment, van der Hoeven said. “Stock releases are about disruption of supplies and there is no disruption of supplies,” she said.
Oil prices are at a “high level,” which is having an impact on the recovery of economies, she said.
Brent crude has gained 15 per cent this year to about $123 a barrel on concern that a conflict between the West and Iran over the nation’s nuclear programme may halt disrupt shipments from the Middle East.
Saudi Arabia can increase crude production by as much as 25 per cent immediately if needed, Oil Minister Ali Al Naimi said March 20, seeking to allay the concern over supplies that has driven prices to the highest in three years.
The country has excess capacity of 2.5 million barrels a day, the minister said, which makes up the bulk of spare capacity in the Opec.
It is premature to speculate about “unconfirmed rumours” regarding stock releases by individual countries, van der Hoeven said in an e-mailed statement March 22. Releasing some strategic oil stockpiles is “one option” being considered to counter rising crude prices, French Industry Minister Eric Besson said this week.
There is no agreement with US President Barack Obama on using strategic reserves to reduce prices, UK Prime Minister David Cameron said last week in New York, adding that tapping stockpiles should be considered.
