Saudi Arabia sees the crisis over Ukraine and possible changes in oil shipments from Iraq and Libya as the biggest risks to its production strategy this year, a person with direct knowledge of the kingdom’s policy said.
The country, with the world’s largest unused capacity for crude output, has kept production steady in recent months to meet strong demand, especially from buyers in Asia where it sells up to 70 percent of its exports, said the person, who asked not to be identified because the matter isn’t public.
U.S. President Barack Obama and European Union officials will hold a summit in Brussels Wednesday that may consider more sanctions against Russia over its role in Ukraine, an EU official said Monday. The EU is considering limiting imports of natural gas from Russia, the official said. World leaders gathered in The Hague amid growing concern over a Russian buildup on Ukraine’s border as pro-Kremlin troops seized a Ukrainian base in Crimea.
The Organization of Petroleum Exporting Countries, which supplies 40 percent of the world’s oil, raised its forecast in the group’s monthly report on March 12 for the amount of crude it will need to provide this year as the economic recovery stokes global fuel use. Saudi Arabia is the world’s biggest crude exporter and the largest producer in OPEC, pumping 9.59 million barrels a day in February, according to data compiled by Bloomberg.
Iraq, OPEC’s second-largest producer, pumped 3.05 million barrels a day last month, the data show. Iraq is boosting output and export capacity and plans to pump as much as 9 million barrels a day by 2020. Libya, with capacity to produce 1.5 million barrels daily, is pumping 150,000 barrels a day, Mohammad al-Harari, a spokesman for the state-run National Oil Corp., said by phone from Tripoli. Many of Libya’s ports and fields are shut amid political unrest.