20 March 2012, Sweetcrude, HOUSTON – Crude oil prices dropped by one per cent following assurance, Tuesday by Saudi Arabia on meeting any shortfalls in global oil supply.
Ali al-Naimi, Saudi Arabia’s Oil Minister, disclosed Tuesday that the kingdom was pumping 9.9 million barrels per day – the highest level in decades – and was willing to open the taps to maximum capacity of 12.5 million barrels per day immediately, if needed.
The kingdom, which has tried to calm oil markets on edge about the potential loss of Iranian supplies this year, has filled up storage levels outside the country to 10 million barrels to help build a cushion for markets.
“I want to assure you that there is no shortage of supply in the market,” Naimi told reporters at a media briefing in Doha on Tuesday, adding supplies were now outpacing global demand by more than 1 million barrels per day.
“We are ready and willing to put more oil on the market, but you need a buyer.”
Brent crude fell $1.66 to $124.05 a barrel at 1546 GMT, while US crude fell $1.91 to $106.18 a barrel.
US and European sanctions, aimed at ending Iran’s nuclear ambitions the West insists will lead to the construction of bombs, have sent oil prices up 15% this year and prompted Tehran to threaten to close the Strait of Hormuz.
Oil prices fell early in the day after Sheikh Sabah al-Ahmad al-Sabah, the ruler of Kuwait, said Iran officials had assured his country that Tehran would not close the Strait, through which 35% of global crude sea-borne shipments pass.