It is impossible for Saudi Arabia to increase its output by 2 million barrels a day

KONTAN.CO.ID – LONDON. Saudi leaders convinced US President Donald Trump that the kingdom could boost oil production if needed and that Saudi Arabia has a production capacity of 2 million barrels a day to compensate the decline in production in Venezuela. Iran.

In a tweet Saturday, Trump said that Saudi Arabia had agreed to increase production to that amount, although the following statement from the White House has narrowed down on this statement.

I just spoke to King Salman of Saudi Arabia and explained to him that because of the unrest and malfunctions in Iran and Venezuela, I ask Saudi Arabia to go to Saudi Arabia. increase its oil production, perhaps up to 2,000,000 barrels. ..The prices are high! He accepted! – Donald J. Trump (@realDonaldTrump) June 30, 2018

Contrary to this badertion, many claim that Saudi Arabia, the largest member of OPEC, is almost impossible to find. increase from 1 million bph production up to 11 million bpd. Industry badysts expect that further oil price rises will occur due to a lack of new supplies.

Reuters understands the views of some of the major observers badysts of OPEC. Here are their comments:

PIERRE ANDURAND, hedge fund manager:

"I think the Saudis want to give Trumps the confidence of being very hard on Iran." Export to zero or attack. It will be interesting to see what the Saudis can really do and for how long it seems that the change of the Iranian regime is the number one priority for the Saudis. "

AMRITA SEN, Chief Oil Analyst on Energy Aspects [19659010] "We will be in unexplored territory.Arabia has the capacity in theory, it takes time and money to put this barrel online, maybe up to 1 year ".

GARY ROSS, Director of Global Oil Analytics at S & P Global;

"The Saudis do not have an unused capacity of 2 million bpd as this would imply a production of 12 million bpd, they could probably generate a maximum of 11 million and even those who manage their system would be stressed" said Ross.

He added that with the potential to reduce production by 1.5 million barrels a day in Iran and additional outages in Venezuela and Libya, the world could miss 2 million barrels per day of production oil without an increase in Saudi production at the end of the year.

OLE HANSEN, Head of Commodity Research at Saxo Bank

"We see another strong signal that two of the world's three largest oil producers are limiting oil price increases. Saudi Arabia has agreed to meet the demand, essentially increasing the risk that OPEC has played its role with the Saudis, Russians and Americans who are now setting the agenda. "

GIOVANNI STAUNOVO, Product Analyst at UBS

" While the tweet of US President Trump is very clear about the amount of oil that he wants to see from Saudi Arabia, the statement of the Saudi press agency is more vague.

"The statement seems to suggest that the kingdom is ready, but first wants to see a greater materialized disruption."

"An increase in Saudi output of 2 million bpd will drive Saudi Arabia's oil production to unexplored territory and completely erase the kingdom's reserve capacity."

"Prices tend to be more volatile over the next few months, trapped between two narratives: excess supply and reduced reserve capacity or tight concerns in the oil market."

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