Saudi Arabia plans to increase its oil production by 200.000 barrels a day next month, the kingdom's oil minister told U.N. chief Ban Ki-moon on Sunday, according to Ban's spokesman. By July Saudi Arabia's output should be almost 10 million bpd.
UN Secretary-general met with Oil Minister Ali al-Naimi in the port city of Jeddah during a one-day trip to the world's largest oil producer. Farhan Haq, a spokesman who is traveling with Ban, reported in an e-mail that the UN chief said al-Naimi told him Saudi Arabia would increase oil production by 200.000 barrels a day from June to July. In May, the kingdom increased its production by 300.000, thus totaling the half million additional barrels promised. Ban also said Saudi Arabia understands that the current price of oil, which topped 139 US dollars per barrel earlier this month, is not normal, according to the official Saudi Press Agency. "The king believes that the current oil prices are abnormally high, and he is ready to restore prices to their appropriate levels" SPA quoted Ban as telling reporters in Jiddah. Saudi Arabia is concerned that sustained high oil prices will eventually slacken the world's appetite for oil, affecting the kingdom in the long run. The United States has reduced its oil consumption this year amid soaring oil prices. The Saudis are also concerned that the current prices are making alternative fuels more viable, threatening the long-term prospects of their oil-based economy. Riyadh has called for a meeting of oil producing and consuming countries on June 22 in Jiddah to discuss ways of dealing with soaring energy prices. Last Friday the benchmark light, sweet crude for July delivery was selling at 134.86 US dollars on the New York Mercantile Exchange and in London the July Brent crude lost 1.84 to settle at 134.25 on the ICE Futures exchange. Saudi Arabia is completing a huge expansion program in its oil industry that is expected to bring its production capacity to 12.5 million barrels a day by 2009, according to the New York Times.