Oil Markets are currently balanced and inventories are at excellent levels, but the geopolitical situation is having an impact on prices, Saudi Oil Minister Ali al-Naimi said Tuesday.
"The market is in a very good position, supplies are adequate and inventories are excellent. Prices are also excellent but they are impacted by geopolitics," he told reporters in Riyadh.
In recent weeks, uncertainties over the Syria crisis and a sharp fall in Libyan oil output have made oil prices volatile and sparked fears about the security of the crude supply in the Middle East, which produces about a third of the world's oil.
Mr. Naimi said the kingdom's production capacity stands at 12.5 million barrels per day, and the Gulf state remains committed to meeting demand in the market.
"Everybody knows about the kingdom's position in the market...the kingdom always tries as much as it can to meet any additional demand," he said.
Industry sources have said the world's energy powerhouse is already nearing its comfortable operational production limits and may not be able to meet any further major shortage in the market.
Saudi Arabia, the world's largest oil exporter and the only producer with significant flexibility to turn its spigots on and off, increased its output by 156,200 barrels a day to 10.19 million barrels a day last month. That is the highest level since at least 1980, when the country opened the taps to make up for a sharp fall in Iran's output after that country's 1979 revolution.
Mr. Naimi declined to say how much the member of the Organization of the Petroleum Exporting Countries is currently producing, but he has often said it is the kingdom's policy to maintain spare output capacity of 1.5 million-2 million barrels a day at all times to cope with emergency shortfalls.
