Saudi Arabia is encouraged by the dramatically improved US crude oil production outlook because it could help stabilize global markets, Petroleum and Mineral Resources Minister Ali I. al-Naimi said.
The biggest question may be whether the US decides to export the crude it produces, he told the Center for Strategic and International Studies on Apr. 30. “Our No. 1 interest is a well-balanced oil market that promotes a strong global economy,” Naimi said.
Technological breakthroughs which have allowed the US to begin produce crude from tight shales and deepwater formations could bring welcome new supplies to global markets, he said.
“In the blink of an eye, the scarcity scare-mongers have been replaced by the apostles of plenty – only this time, they’re backed by scientific evidence,” Naimi said.
The US will continue to need imported crude, he added. “This talk of ending US reliance on imports is naïve and simplistic,” he said. “Talk of US energy independence disregards inter-linked markets. Just as I didn’t accept the peak oil argument years ago, I reject the US energy independence idea now.”
Naimi expects global demand for fossil fuels to remain strong, with a growing role for renewable and alternative energy sources. “The final step will be to diminish [fossil fuels’] negative environmental impacts, but this can be accomplished if enough brain-power is mobilized,” he said.
While Saudi Arabia believes global petroleum demand will keep growing, it does not plan to dramatically increase its production capacity, according to Naimi.
“Based on the call for Saudi oil, we see no need for it in 2030 or 2040,” he explained. “We’ll be lucky to go past 9 million b/d by 2020. We’re pleased to see production coming from so many other suppliers, and see no need to go beyond our 12.5 million b/d capacity.”
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