Zanganeh: Saudi Oil Production Capacity Not Unrestricted

Oil Minister Bijan Zanganeh on Monday dismissed claims by Saudi Crown Prince Mohammed bin Salman that the kingdom is prepared to make up for any oil market shortfall caused by US sanctions on Iran.

"It seems that such remarks were made under US pressure on Saudi authorities," Zanganeh said, according to oil ministry news service Shana."Otherwise in reality, neither the Saudis nor any other country could replace Iran's exports," S&P Global reported.

Iran's crude and condensate exports fell by 11.5% to 1.7 million bpd in September from 1.92 million bpd in August, their lowest in at least two-and-a-half years, an S&P Global Platts analysis of trade flow data found Monday.

Platts Analytics expects Iranian crude and condensate exports to fall to 1.1 million bpd by October loadings, and to 800,000 bpd by Q4 2019, down from 2.91 million bpdin April.

In an interview with Bloomberg News published Friday, the Saudi crown prince said the kingdom and its allies in an OPEC/non-OPEC coalition have recently boosted output by some 1.5 million bpd, more than doubling the 700,000 bpd loss in Iranian supplies.

"We export as much as two barrels for any barrel that disappeared from Iran recently," Prince Mohammed said. "So we did our job and more."

Zanganeh reiterated his skepticism that Saudi Arabia has enough spare capacity to keep the market sufficiently supplied to prevent any price spike caused by US sanctions.

Saudi Arabia has never pumped higher than 10.7 million bpd across an entire month, the level that Saudi energy minister Khalid al-Falih last week said the kingdom would average in October. But it claims to be able to produce 12 million bpd at will.

"The market and rising prices are the best evidence of concern that the market is in short supply and is rightly nervous about the severe shortage of oil in the coming months," Zanganeh said.