Analysts predict that Saudi Arabia will surpass its record oil output this year, despite pressure from other oil exporting countries to cut back and help increase world oil prices, the Wall Street Journal reported on Monday.
The Saudi high output comes to offset a decline from Iran which is under international sanctions.
“Our data shows that Saudi Arabia is actively going out there trying to take up Iran's market share,” an analyst said.
Saudi Arabia’s average production level was 9.94 million barrels a day in the first half of 2012. Analysts told the paper that the output averaged 9.9 million to 10 million barrels a day in July due to increased exports and more consumption of crude to meet the high domestic demand for electricity used for air conditioning in summer months.
During the last meeting of the Organization of Petroleum Exporting Countries (OPEC) in June, Saudi Oil Minister Ali al-Naimi responded to demands that the kingdom curb its output by saying he would only be willing to cut production if others cut back first, according to sources cited by the Journal.
London-based Saudi Asharq Al-Awsat daily reported last month that Saudi output was likely to range from 9.7 million to 10 million barrels a day for the next three months. “The current demand encourages maintaining the current production levels,” a Saudi official told the newspaper.
Saudi Arabia's full output capacity is 12.5 million barrels a day, but analysts who spoke to the Journal questioned the country’s ability to pump at much higher than current level on consistent bases.
But Samuel Ciszuk, an analyst at consultancy KBC Energy Economics, told the newspaper that Saudi Arabia might be willing to pump higher than current level, which is within its comfortable operational production limits, “temporarily to make up for shortages that arise in the market.”