HOUSTON, Feb. 12 (UPI) -- Saudi Arabia doesn't produce as much oil as it can, a spare capacity the head of the state oil firm says provides a crucial safety net.
President Bush during a recent tour of the Middle East led the most recent public push on OPEC producers to increase oil flow to ease steadily high prices. The Organization of Petroleum Exporting Countries officially kept output stable, though production has increased lately.
Saudi Arabia produces about 9 million barrels per day, and capacity is between 10.5 million and 11 million bpd, depending on estimate sources. It plans to increase capacity to 12 million bpd by end of 2009.
The Saudi government policy is to "keep between one and a half to two million of extra capacity so that when the world is faced with the problem it doesn't have a hiccup," Abdallah Jumah, president and chief executive of Saudi Aramco, said Tuesday in Houston at the CERAWeek international energy conference. "And I can tell you that this capacity that Saudi Arabia has been keeping, for many, many years, has always stood between economic prosperity and economic peril."
Part of the reason oil ended at more than $93 per barrel Tuesday is because of geopolitical tensions. The Iraq war has reduced that country's production, and a war with Iran could further hurt supplies generated by the world's second-largest oil holder.
Ben Lando, UPI Energy Editor