Saudi Arabia’s King Abdullah has prohibited the extraction of oil from newly discovered oil reserves to save oil resources for the future generations, as reported by the Saudi Press Agency.
According to King Abdullah, “I keep no secret from you that when there were some new finds, I told them, 'no, leave it in the ground, with grace from god, our children need it”.
The U.S President George W. Bush advised the Saudi king to help in reducing the exceeding prices by prompting OPEC to produce more oil. On a visit to Saudi Arabia, the U.S. energy secretary urged for more oil while the vice president discussed high oil prices with the king.
Saudi Arabia has invested billions on developing over 2 million barrels per day of surplus crude capacity and is the only country that is able to rapidly produce large amounts of crude oil supply, to overcome any unpredictable supply shortages.
OPEC continued to maintain that there is a stable production of oil in February and March, even after the calls for more oil from the U.S. and consumers from the rest of the world. OPEC officials held that high prices were due to other issues beyond the group’s control. They further added that the rise in prices can be attributed to the weak dollar and diversion of cash flow into commodities because of speculation.
Saudi Oil Minister Ali al-Naimi reported last week, that global oil markets had adequate supplies and there was no need to produce more oil in the market even after prices are reaching record levels of over $112 a barrel.
Saudi Arabia has reduced its production by 9 million barrels per day, showing lower customer demand, according to Saudi oil source on Friday. In previous months the country has produced almost 9.2 million barrels per day. Demand for crude oil normally falls at this time of year after the end of winter. At this time refiners perform maintenance and make preparations to meet the summer demand.
Production capacity of Saudi Arabia is 11.3 million bpd. It is scheduled to increase by 12.5 million bpd in 2009.