Saudis ready to supply more oil

Jeddah, Saudi Arabia: Saudi Arabia is willing to produce more oil if customers need it, the kingdom's oil minister said on Sunday without citing any specific output increase.

Saudi Arabia, the world's largest oil exporter, has been under intense pressure from the US and other oil consumers to increase its crude output to help slow the soaring price of oil.

The kingdom already announced modest increases and said it would pump 9.7 million barrels a day beginning in July. But those increases have not done much to stem the skyrocketing price of oil, which closed near $135 a barrel on Friday.

The high prices are affecting consumers and economies across the United States, Europe and much of the world.

It was unclear if Oil Minister Ali Al Naimi's remarks at a high-level oil summit in the port city of Jeddah would quell concerns.

Al Naimi, who was expected to formally make the announcements in a speech late last night, reiterated his government's position that the recent run-up in prices has not been caused by a shortage of supply. But he said he also believes each country must do what it can "to alleviate these difficult conditions."

"Therefore, given our current spare capacity, today I would like to state that for the remainder of this year Saudi Arabia is willing to produce additional barrels of crude oil above and beyond the 9.7 million barrels per day which we plan to produce during the month of July, if demand for such quantities materialises and our customers tell us they are needed," Al Naimi said in the speech, a copy of which was obtained by the AP in advance.

The conference's final statement restated the participants' concern over volatile oil prices, but attempted to strike a balance over the cause. Producers, like Saudi Arabia say it is due to speculation, while the US maintains it is due to insufficient supply.

"Spare capacity throughout the oil supply chain is important for the stability of the global oil market," said the statement, which also noted that 'the transparency and regulation of financial markets should be improved.'

Al Naimi also said that the kingdom was willing to invest to boost its spare oil production capacity above the current 12.5 million barrels per day planned for the end of 2009, reversing previous statements that the country would not go beyond that figure.

Alternative energy

"We have identified a series of future crude oil mega-increments totalling another 2.5 million barrels per day of capacity that could be built if and when crude oil demand levels warrant their development," he said.

He cited a prospective increase of 900,000 barrels per day from the Zuluf field, 700,000 from Safaniyah, 300,000 from Berri, 300,000 from Khurais and 250,000 barrels from Shaybah.

Earlier, King Abdullah Bin Abdul Aziz also said Saudi Arabia was not to blame for soaring oil prices and instead pointed his finger at speculators, high fuel taxes in consuming countries and increased oil consumption in developing economies.

"There are several factors behind the unjustified, swift rise in oil prices and they are: Speculators who play the market out of selfish interests, increased consumption by several developing economies and additional taxes on oil in several consuming countries," the king said.

"Despite these facts and even though Opec ... has sought to meet demand, we find those who point the finger of blame at Opec alone," he added.

Abdullah urged the summit's delegates to "uncover the truth" and dispel rumours to get the "real and full reasons" behind the skyrocketing price of oil.

British Prime Minister Gordon Brown also called for future commitments from producers for increased oil and gas supply but urged all countries should improve energy efficiency and develop alternative sources of energy, including nuclear power.