Saudi Arabia said on December 4th that the kingdom would coordinate with other producers and the International Energy Agency (IEA), which controls emergency oil stockpiles for its 24 member countries, to replace barrels lost from world oil markets after Iraq halted its exports on November 30th.
A Saudi source said that: “Saudi Arabia, in coordination with other producers, will definitely fill the gap left by the suspension of Iraqi oil exports.” Saudi Oil Minister Ali Naimi had earlier said that the kingdom could produce an additional 1.8 million b/d in 90 days.
Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah also indicated that OPEC producers could cover the drop in exports, but that the markets have enough supplies for now.
Sheikh Saud said that: “Kuwait, Saudi Arabia and the U.A.E. are capable of covering the drop in oil markets after Iraq stopped its exports … But world markets are saturated for the time being and there is no need to boost production to compensate for Iraq’s quota.”
However, Iraqi Trade Minister Mohammed Mehdi Saleh had also said that: “compensating Iraq’s share, which is 2.5 million b/d, which is not a small quantity, will be difficult.”
The U.S. said on December 4th that it could release additional oil from the Strategic Petroleum Reserve (SPR) if Iraq made good on its threat to cease exports to the U.S. market.
Iraq’s representative to the U.N, Saeed Hasan, said earlier in the same day that Iraqi President Saddam Hussein would soon issue a decree banning Iraqi crude from being sold to Baghdad’s enemies, presumably the U.S. and the U.K. State Department spokesman Richard Boucher said that: “We are ready to take action to add supply very quickly if the situation should warrant.”
He added that: “The system of reserves and stocks that have been put together by the IEA would put us into a position to respond quickly, effectively and readily if we needed to.”