Iranian Oil Minister Bijan Namdar Zanganeh shrugged off USA plans to drive the country's crude exports down to zero, saying the Islamic Republic's oil exports can not be stopped.
Saudi energy minister Khalid al-Falih said on Tuesday that despite expected supply disruptions from United States sanctions against Iran that kick in from November 4, Saudi Arabia would step up to "meet any demand that materialises to ensure customers are satisfied".
The Saudi minister expected demand for oil, which now stands at about 100 million barrels per day, to rise to 120 million bpd over the next three decades.
Economist Intelligence Unit energy analyst Peter Kiernan said it would be self-defeating for Saudi Arabia to cut oil supply, as it would risk losing market share to other exporters while losing its reputation as a stable player in the market.
New US sanctions, targeting Iran's oil sector and banking, are to go into effect on November 4.
"I believe that our (oil) exports could continue at a suitable level and..."
Specifically, Khalid al-Falih, energy minister for the Saudis, told Russia's TASS news agency that his kingdom won't unleash a 1973-style oil embargo on Western consumers (when it retaliated against countries supporting Israel during that year's Yom Kippur war) but instead is focused on raising output to compensate for losses in Iran and other countries.
"If 3 million barrels per day disappears, we can not cover this volume. It would be in Russia's best interests not to facilitate Iranian evasion of USA sanctions". The kingdom has also hinted that it could turn to oil trade in Chinese yuan in retaliation for probable USA sanctions.
Cumulatively, oil imports by India from Iran in the first six months (April to September) of the current financial year increased 39 per cent to 15.05 MT from 10.84 MT imported in the corresponding period a year ago, fresh data sourced from the Directorate General of Commercial Intelligence and Statistics (DGCIS), an arm of the ministry of commerce and industries, showed. "So we have to use oil reserves", he said.
Brent crude, the global benchmark, was down 10 cents to $76.34 a barrel. "Investing in the capacity and producing the capacity will continue to be done", Falih said despite complaining of the high cost of raising and sustaining such capacity. Oil prices have jumped over 40 per cent since January a year ago thanks to the global oil cuts and more recently concern about dwindling production from major oil producers, including Iran.
"We export as much as two barrels for any barrel that disappeared from Iran recently".
Saudi Arabia, which is now producing below its maximum oil production capacity of 12 million bpd, has assured markets it can ramp up its output to fill supply gaps in the market, which is being tested by disruptions in key Opec producers Venezuela and Iran. Meanwhile, supplies at Cushing likely increased 1.5 million barrels last week, according to a forecast compiled by Bloomberg.
"If oil prices were to rise too much, that would slow the global economy and set off a global recession".