Saudi ready to fill gap in global oil supply

Top oil exporter Saudi Arabia stands ready to fill any oil supply gap — "perceived or real" — as oil prices rally on fears of a potential loss of Iranian output. "Today the oil market is generally balanced and there is ample production and refining capacity... Saudi Arabia and others remain poised to make good any shortfalls — perceived or real — in crude oil supply," Oil Minister Ali Al Naimi said yesterday in a speech at the International Energy Forum. The Saudi oil minister has previously said the kingdom was prepared to raise production only if it sees increased demand from customers. Gulf oil sources said on Tuesday the United States was pressing Saudi Arabia to boost output to fill a likely supply gap arising from international sanctions on Iran Saudi Arabia is the only producer with spare capacity and oil importers will rely on Riyadh to fill the gap should Iranian output and exports drop. Embargo A European Union embargo on Iranian crude takes effect on July 1. US and European financial sanctions have made it more difficult for other importing nations to process payments for Iranian crude. Oil prices have risen sharply this year to above $125 a barrel for Brent crude. Oil traders are keen to know the likely timing of any Saudi supply increase to counter Iranian decline. Already running close to record highs of about 10 million bpd, Saudi Arabia says it has the capacity to increase production to 12.5 million bpd. Iran produces below 3.5 million bpd and exports around 2.2 million bpd to world markets.