Saudi said to pump oil near 32-year high on Libya cut

A view of Saudi Aramco’s Shaybah oil facility at twilight. Opec’s largest producer supplied 10.07mn bpd to market in August, taking into account inventory movements, the person with direct knowledge said on Sunday.

Bloomberg/Manama

Saudi Arabia produced 10.19mn bpd of crude oil in August, according to a person with direct knowledge of the kingdom’s output policy, pumping at the highest level in more than 32 years.

Opec’s largest producer supplied 10.07mn bpd to market in August, taking into account inventory movements, the person said on Sunday, asking not to be identified because the matter is confidential. Saudi Arabia boosted its monthly output from July as Libya struggled to end protests at oil fields and ports that have reduced output in the North African state to the lowest since October 2011.

“The market lost a huge amount of Libyan crude in recent months, and someone must replace that crude either directly or indirectly,” said Sadad al-Husseini a Dhahran, Saudi Arabia-based analyst and a former executive of Saudi Arabian Oil Co (Saudi Aramco)

The kingdom isn’t seeking to offset Libya’s shut-in barrels, and the two counties produce different varieties of crude, a person with knowledge of the matter said on August 29. Still, Saudi Arabia will probably maintain its production in September at a level comparable to August and July, this person said. Saudi output for August reached the highest since December 1980 when the nation produced 10.28mn bpd, according to the US Energy Information Administration.

Some buyers of Libyan crude can process Saudi heavy and sour grades, and many can use blends of heavy and lighter crudes to replace light, sweet Libyan oil, al-Husseini said yesterday by phone from Riyadh.

Kamel al-Harami, an independent oil analyst based in Kuwait, said Saudi Arabia is the only country with adequate spare capacity to replace crude that is unavailable this year from Syria, Iran, Iraq, South Sudan, Nigeria and Libya because of security and political reasons.

“The Saudis are doing two things,” al-Harami said by phone from Kuwait. “First is that they are pumping more heavy crude to the market to replace the Middle East output, and second, they are blending their heavy crude with lighter grades to replace the light African oil,”

The Organisation of Petroleum Exporting Countries increased production by 116,000 bpd in August to 31.04mn bpd, with Saudi output rising 150,000 bpd to 9.95mn barrels, according to a Bloomberg survey of producers, companies and analysts. Opec supplies about 40% of the world’s oil.

The group comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the UAE and Venezuela. Opec will next meet in Vienna on December 4.