Saudi Arabia has no intention to repeat 1973 oil embargo, says Al-Falih

Saudi Arabia has no intention of repeating a 1973-style oil embargo on Western consumers, and will isolate oil markets from politics, energy minister Khalid Al-Falih told Russian news agency TASS.

"Saudi Arabia has been consistent in its policy. We work to stabilize global markets and facilitate global economic growth. That policy has been consistent for many years," the minister noted.

"Saudi Arabia is a very responsible country, for decades we used our oil policy as a responsible economic tool and isolated it from politics. So let's hope that the world would deal with the political crisis, including the one with the Saudi citizen in Turkey, with wisdom."

Asked if Saudi Arabia can fill the supply void created after Iran oil sanctions come into force, Al-Falih said the Kingdom can raise its production capacity to 12 million barrels per day (mbd) from the current level of 10.7 mbd in October, if necessary.

"But if 3 mbd disappears, we cannot cover this volume. So we have to use oil reserves. But it is very important for the world to support Saudi Arabia, because it is the only country that invests heavily in spare capacities," the minister said.

While the Saudi oil production is likely to go up to 11 mbd in the near future, Al-Falih said increasing production capacity from currently 12 mbd to 13 mbd would require incremental investments of $20 billion to $30 billion.

When asked if the world can avoid oil prices hitting $100 per barrel again, Al-Falih did not guarantee if oil prices would not go higher, but admitted that if oil prices go "too high" it would slow down the global economy and trigger a recession.

“I cannot give you a guarantee, because I cannot predict what will happen to other suppliers.”

However, global supply could be helped next year as Russia, the UAE, Kazakhstan, Brazil and the United States plan to increase production, he added.