RIYADH (AFP) – Saudi Oil Minister Ali al-Naimi said Tuesday OPEC is prepared to meet any shortage of supplies due to unrest in the Middle East and that its members have sufficient spare capacity to do so.
“There is absolutely no shortage of supply now… OPEC is ready to meet any shortage in supply when it happens,” Naimi told a press conference at the end of a consumer-producer meeting that signed a cooperation charter.
“There is concern and fear but there is no shortage,” the minister reiterated in a bid to assure consumer countries that crude oil supplies are guaranteed despite sweeping unrest in the Middle East and North Africa.
Saudi Arabia, OPEC’s largest producer, is pumping around 8.4 million barrels per day, but Naimi said the kingdom still has a spare capacity of another four million bpd.
Speaking after unrest in the Middle East caused oil prices to jump Tuesday to $108 a barrel, the minister said the market volatility was only short-term and would not result in any shortages.
“OPEC and particularly Saudi Arabia will compensate any shortage because we did that successfully in the past… I want this transmitted to the market so the people can sleep well tonight,” Naimi said.
Naimi said the current oil market was completely different from that of 2008, when supply bottlenecks drove crude prices to historical levels of more than $147 dollars a barrel.
In 2011, however, supply and demand are equal, supply is sufficient, inventories are at a comfortable level and the worldwide spare capacity is around six million bpd.
US Deputy Energy Secretary Daniel Poneman meanwhile called on oil producers to boost output in a bid to ease crude prices.
“We think that the proper response (to the high prices) is that producers respond to those price signals and see the need for more production and bring that product to the market,” Poneman told reporters in Riyadh.
“When producers bring product to the market, price starts to subside,” the US official said on the sidelines of a producer-consumer conference in the Saudi capital.
“All oil producers need to respond… expect all of them to respond.”
The oil ministers of Kuwait and United Arab Emirates, two leading OPEC members, also said on Tuesday that the organisation was closely watching developments and was prepared to act when necessary.
Oil prices shot up eight percent to $93.36 a barrel in New York opening trade Tuesday as worries about unrest in Libya hit the market.
Prices jumped $7.16 a barrel for the WTI crude contract in the first day of trading on the New York Mercantile Exchange since violence escalated in key North African oil exporter Libya over the weekend.
In London earlier Tuesday Brent North Sea crude rose more than two dollars from Monday to $107.75 on Libya fears.