Saudis unable to replace Iranian supply

"I announce with certainty that (crude oil produced by) Saudi Arabia cannot take the place of Iranian oil in the global market," National Iranian Oil Company (NIOC) Director General for International Affairs Seyed Mohsen Qamsari said Wednesday. He also reiterated that Saudi Arabia will not be able to make up for the absence of Iran's oil in the European markets if Iran halts EU oil exports. Saudi Arabia, which currently produces 10 million barrels a day, has promised the Europeans to fill the gap in case they implement their new set of oil embargos against Iran from July. OPEC is producing more than one million barrels a day above a ceiling of 30 million barrels a day agreed in December, an overproduction largely tied to the Saudi output increase. At the December gathering, Iranian Oil Minister Rostam Qassemi met his Saudi counterpart Ali al-Naimi and said he was told Saudi Arabia wasn't trying to take Iran's share of the oil market. Saudi Arabia still denies its increasing production to replace Iran. But Qassemi said "the latest policy of Saudi Arabia (has) turned out otherwise." Saudi Arabia's high production is set to continue after the US and the European Union have ruled out easing sanctions on Iran even after talks between Iran and major powers Sunday - the first in over a year - ended with a pledge to pursue discussions next month, interrupting months of steadily escalating tensions between both sides.