Even if Saudi Arabia could produce up to 12 million bpd, the rate of increase cannot offset the production declines in other cartel members.
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With World in Energy Shock, Saudi Oil Cushion Gets Very Thin / Today Saudi Arabia is producing below their official quota. Why???
When French President Emmanuel Macron whispered in Joe Biden's ear last month that top global oil exporter Saudi Arabia has very little additional capacity to increase output, the U.S. President looked surprised.
Biden is due to land in Riyadh later this month, and he will likely hear the same sobering message – don't count much on Saudi Arabia to help replace Russian oil.
How much Saudi Arabia – seen as the "central bank" of global oil – can really pump is an industry secret and skepticism on this usually grows at times of high oil prices and strained global production. The kingdom, which says it can pump 12 million barrels per day (bpd), has regularly proved its doubters wrong in the past.
SAUDIS HOLDING BACK
But as the world faces one of its worst ever supply crises, industry insiders, OPEC sources and other experts are asking whether, with current output of at least 10.5 million bpd, Saudi Arabia really has another 1.5 million bpd up its sleeve that can be brought online quickly and sustained.
Adding to skepticism about spare capacity, Saudi Arabia has been pumping below its OPEC quota despite near-record oil prices, and OPEC figures show drilling of new wells in the kingdom last year remained well below pre-pandemic levels.
A senior industry source who recently sat down with the management of Saudi state oil company Aramco aid he was told the company had at most a further 1 million bpd of spare capacity that was readily available.
"If push comes to shove, then Aramco have (sic) 1 million bpd that they can get into the market relatively quickly, but that can't be sustained for long," the source said.
https://www.newsmax.com/finance/streett ... 0102w6cv75
OPEC+ is out of spare capacity
OPEC+ is out of spare capacity
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: OPEC+ is out of spare capacity
The Saudi's say they can increase production to 13 Mbbl/day by 2026 or 2027.
So not anytime soon.
Still I have to wonder. Why would the Saudi's start selling shares of Aramco unless they knew they were peaking and the best days are behind them. In that case, sell shares, grab the cash and run! Anyway that is my hypothesis.
I've heard that the Saudi's have been drilling slant wells into their fields in the past 5 years or so, creaming the top. If so, I would definitely sell shares and grab the cash, all the while claiming we have ton's of reserves!
https://english.aawsat.com/home/article ... st%20month.
Anyway, I remain doubtful about their capacity.
Kevin
So not anytime soon.
Still I have to wonder. Why would the Saudi's start selling shares of Aramco unless they knew they were peaking and the best days are behind them. In that case, sell shares, grab the cash and run! Anyway that is my hypothesis.
I've heard that the Saudi's have been drilling slant wells into their fields in the past 5 years or so, creaming the top. If so, I would definitely sell shares and grab the cash, all the while claiming we have ton's of reserves!
https://english.aawsat.com/home/article ... st%20month.
Anyway, I remain doubtful about their capacity.
Kevin