LONDON: Saudi Arabia is increasing its oil production and exports as part of a contingency plan in case any US strike on Iran disrupts supplies from the Middle East, two sources familiar with the plan said on Wednesday.
The Saudi government media office did not immediately respond to a request for comment on the plan.
US President Donald Trump has said he is considering a strike on Iran to pressure its leaders to agree a deal to curb Tehran’s nuclear programme. The United States has assembled a large military force in the Middle East in recent weeks.
Last year, Saudi Arabia lifted oil exports in June by around 0.5 million barrels per day, shipping more crude to overseas storage, just as the United States attacked Iranian nuclear sites.
The plan this year is similar to 2025, according to the two sources. Saudi Arabia is raising oil output for contingency purposes to boost exports, the sources said.
The kingdom will dial back on the plan if no disruption happens and will produce less oil later to keep in line with its OPEC+ quotas, one of the sources said. Iran, which produces over 3 percent of global oil, has pledged to retaliate against any strikes, potentially putting at risk other oil flows from the Middle East.
More than 20 million barrels of crude, condensate and fuels pass through the Strait of Hormuz daily, including volumes from Saudi Arabia, the UAE and Kuwait as well as gas from Qatar.
Saudi Arabia, OPEC’s biggest producer, has intervened in oil markets for decades to provide more oil during disruptions or cut output when it felt the market was oversupplied.
Comments