Gulf OPEC members ready to raise output if there is demand -sources
By Rania El Gamal
DUBAI, April 23 (Reuters) - Gulf OPEC producers can step in
to meet any oil supply shortage following a U.S. decision to end
waivers on buyers of Iranian crude, but will first wait to see
whether there is actual demand, OPEC and industry sources said.
The United States has decided not to renew exemptions from
sanctions against Iran granted last year to buyers of Iranian
oil, taking a tougher line than expected.
Eight countries, including China and India, were granted
waivers for six months, and several had expected those
exemptions to be renewed.
A senior U.S. administration official said Trump was
confident Saudi Arabia and the United Arab Emirates would
fulfill their pledges to compensate for the shortfall in the oil
Gulf oil producers are committed to market stability and
have the capacity to raise production, but any decision to boost
output has to be a measured one depending on demand, the sources
"The question is how fast and by how much will OPEC raise
output. This still needs to be done after consultations with
other countries," one source said.
"It needs to be discussed and studied. There is an (OPEC)
agreement that must be respected, we will not (raise output)
immediately for sure."
Another OPEC source said any decision to raise output must
depend on demand.
"There must be actual impact on the market and a real demand
from customers," this source said, adding that any physical
additional barrels by Gulf oil producers to compensate for a
supply drop from Iran are unlikely to be seen until June.
Saudi Arabia's oil exports in May are not expected to be
much higher than April, two sources said.
The sources said Saudi Arabia's May oil output will be
higher than April, but still within its production target under
the OPEC+ supply-cutting deal of 10.3 million bpd. The rise in
Saudi May oil output is not related to Iran sanctions, the
The kingdom's exports in April will be below 7 million
barrels per day, while production is around 9.8 million bpd,
Saudi officials said.
Washington reimposed sanctions in November on Iran's oil
exports after U.S. President Donald Trump pulled out of a 2015
nuclear accord between Iran and six world powers.
Saudi Energy Minister Khalid al-Falih said on Monday that
his country, the world's top oil exporter, was monitoring oil
market developments after the U.S. statement. He also said
Riyadh would coordinate with other oil producers to ensure a
balanced market and adequate supply.
A source familiar with Saudi thinking told Reuters on Monday
that the country was willing to compensate for any potential
loss of crude supply from Iran, but would assess the impact on
the market before raising output.
The Organization of the Petroleum Exporting Countries,
Russia and other producers, an alliance known as OPEC+, are
reducing output by 1.2 million bpd from Jan. 1 for six months.
They meet on June 25-26 to decide whether to extend the pact.
On May 19, a panel of energy ministers from major oil
producers, known as the JMMC, is due to discuss the oil market
and make recommendations ahead of the June policy meeting, the
(Reporting by Rania El Gamal. Editing by Dale Hudson and Jane
© 2019 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.