—but that’s not what the Saudis are saying.
The United States and others have been urging Saudi Arabia and other Persian Gulf Arab oil producers to up their production so that other countries will be willing to stop buying from Iran.
The Saudis have been hiking their output this year. Saudi Oil Minister Ali an-Naimi last week said Saudi output was currently 10 million barrels a day or 25 percent over its nominal OPEC quota of 8.014 million. Saudi output, according to Platts, was just 8.2 million barrels a day one year ago in November 2010.
Iranian Oil Minister Rostam Qasemi met last week with Naimi at the OPEC meeting in Vienna. Qasemi emerged and told reporters he had received a pledge from Naimi that the Saudis would refrain from flooding the market with oil in case of an embargo on Iranian oil sales.
Qasemi said he spoke to Naimi and Naimi “rejects” the notion that “he wants to replace Iranian crude if Iran faces [such] sanctions.”
But when Naimi emerged and was asked about that by reporters, he brushed such talk aside as merely “speculative.”
Furthermore, in another meeting with reporters, Naimi implied that Saudi Arabia would be happy to fill in for any loss from a boycott of Iran. Asked if Saudi output would be cut as Libyan output rises, Naimi said, “If Libya increases, it doesn’t necessarily mean Saudi will cut. We don’t react to that, we react to market demand.” And if Iran is shut out of sales, that will mean the market will demand more Saudi oil.