US report says Saudi Arabia will raise oil output

Dubai: The International Energy Outlook 2006, issued by the US Department of Energy, expects Saudi Arabia - the largest oil exporter - to increase its crude oil production from 12 to 18 million barrels per day by 2030.

Oil prices are expected to hover between $34 and $96 per barrel in 2030, the report said.

The Arabic version of the report, published by the Dubai-based Gulf Research Centre, expects a gradual retreat in oil prices in 2006 and further decline to $47 per barrel by 2014.

The prices are expected to increase by 1.2 per cent annually until 2030.

Guy Caruso, Energy Information Administrator in the US Department of Energy, said at a press conference yesterday that $50 per barrel was "reasonable".

He also anticipated a jump in prices should Opec decide to cut production for the second time this year at its next meeting.

Fawzi Aloulou, the Energy Economics expert in the US Energy Information Administration, refused to comment on why the report did not say anything about the effect of Iran's nuclear programme on oil markets, in the light of the Iranian threat to halt oil exports if sanctions are imposed.

"There are instructions from the US Congress and US Administration to the Energy Department to avoid political issues in the report," he said.

"If Iran ceases its oil exports, we will amend our expectations, as markets will witness a shortage of 2.8 million oil barrels a day," he added.

"Saudi Arabia will increase its oil production from 12 million to 18 million barrels daily, depending on oil prices and Saudi Arabia's economic growth if it wants to save its revenues for its increasing projects.

"But if prices of oil exceed $96 per barrel, Saudi Arabia will not increase its production capacity," he added.

The IEO 2006 report also predicted that world oil demand would increase by 47 per cent from 2003 to 2030.

In absolute terms, demand would grow from 80 million barrels per day in 2003 to 98 million barrels per day in 2015.