Saudi Arabia, OPEC's leading oil producer, will adjust its oil export levels if needed as Libya resumes its own oil production, though the cartel expects Libya's output recovery after Col. Moammar Gadhafi's reign will be slow and gradual, a senior Gulf OPEC official said Monday.
Saudi Arabia
,
OPEC's leading oil producer, will adjust its oil export levels if needed as
Libya
resumes its own oil production, though the cartel expects
Libya
's
output recovery after Col. Moammar Gadhafi's reign will be slow and gradual, a
senior Gulf OPEC official said Monday.
Saudi Arabia
pledged
in June to raise its output to as much 10 million barrels a day, after the loss
of Libyan oil supplies and as a meeting of the Organization of Petroleum
Exporting Countries broke up with no decision on how to guide crude-oil
production.
The kingdom then raised its output to an average 9.85 million barrels a day in
July, a senior Saudi oil official said earlier this month. That is the
country's highest level since the early 1980s, when the revolution in
Iran
and
the subsequent war with
Iraq
stopped the vast majority of
Tehran
's
production.
Likewise, OPEC also has adjusted its output as Iraqi oil production grew after
Saddam Hussein regime's fell and as Russian output grew after the breakup of
the
Soviet Union
. OPEC officials said they retain that flexibility,
but they expect Libyan developments will only briefly affect oil prices.
"It is great news that Gadhafi's regime is coming to an end, but
Libya
's
output is going to take a long time to recover, and the recovery will be
gradual," the senior Gulf official told Dow Jones Newswires Monday. "The
market will absorb the Libyan oil just as it did before with
Iraq
and
Russia
, and
any pressure on prices will be short-lived."
OPEC officials said the group currently sees no need for an emergency meeting
to discuss the situation. The group's next scheduled output-policy meeting is
Dec. 14 in
Vienna
.
"The situation in
Libya
is
still very vague, and OPEC will adopt the wait-and-see attitude for now,"
a delegate from another
OPEC
Gulf
country said.
Oil prices came under pressure Monday, initially sending the front-month Brent
crude futures contract around $3 a barrel lower in early trade. Investors
reacted to news that rebel forces had entered
Tripoli
Sunday, fueling hopes that the six-month-long conflict is nearing an end.
Iran
's
governor for OPEC Mohammad Ali Khatibi told the country's oil ministry website
Shana that OPEC will react if oil prices continue their downward trend.
Iran
holds
the OPEC rotating presidency this year.
Libya
is a
major oil exporter and produces a type of crude that is particularly coveted. The
popular uprising in the North African nation this year cut off its roughly 1.3
million barrels of daily oil supplies. Experts say the country could take up to
three years to return to its pre-war production capacity.
"With the supposed falling of Gadhafi's regime, external support in terms
of finance and expertise will be readily forthcoming, and perhaps Libya will be
able to return at a higher level than it had before the revolution," said
independent oil analyst John Hall. "But at least the market knows that the
situation will not deteriorate further and will soon start to improve."
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