Saudi Oil Minister Ali al-Naimi said on Wednesday that the oil-rich kingdom stands ready to cover any shortfalls of crude supplies in the market.
“As I have noted many times before, Saudi Arabia and others remain poised to make good any shortfalls — perceived or real — in crude oil supplies,” he told participants at the 13th International Energy Forum in Kuwait, the largest gathering of oil producing and consuming countries.
Iran last month slammed comments made by Naimi in January vowing to pump more oil to cover any shortfalls resulting from new sanctions on Tehran’s exports of crude.
Naimi said speculation was the main cause for volatility in oil prices, after New York’s main contract, West Texas Intermediate, hit $110 a barrel on March 1, before easing to around $106 now.
“Ultimately, volatility is caused by speculation in the marketplace, based on a conjecture over tighter supply-demand balances in the future, and increased interest in energy commodities as an asset class for financial investors,” he said.
“It is this emphasis on ‘paper barrels’, rather than actual cargos, which creates problems,” he added.
Naimi acknowledged that other factors have an impact on prices, namely “misinformation about peak oil, unsubstantiated concerns about production capacity,” as well as “global events” and the “often sensational reporting of such events.”
The United States and the European Union are ramping up sanctions on Iran in an effort to get it to halt its nuclear activities, which they fear include research on developing atomic weapons.
The International Energy Agency said on Wednesday that it expected exports from Iran, OPEC’s second biggest producer, to fall by about 800,000 barrels per day to one million barrels bpd after the middle of this year.
Energy-hungry nations in Asia have voiced concerns over the availability of alternative sources to replace Iranian imports cut off by sanctions.