CIA chief says appears Saudi oil "ramping up"

WASHINGTON Tue Jan 31, 2012 5:47pm EST

A gas flame is seen in the desert near the Khurais oilfield, about 160 km (99 miles) from Riyadh, June 23, 2008.  REUTERS/Ali Jarekji

A gas flame is seen in the desert near the Khurais oilfield, about 160 km (99 miles) from Riyadh, June 23, 2008.

Credit: Reuters/Ali Jarekji

WASHINGTON (Reuters) - Saudi Arabia's oil production appears to be "ramping up" and can fill some of the demand shortfalls caused by sanctions on Iranian exports, CIA Director David Petraeus said on Tuesday.

Sanctions on Iran oil imports appear to be biting much more in recent weeks, he said at a Senate intelligence committee hearing.

China has reduced its imports of Iranian oil and "it remains to be seen whether that continues. It appears that Saudi Arabian production is ramping up and can fill some of the demand that might have been met by Iranian exports now that there are the sanctions on the Central Bank of Iran," Petraeus said.

The United States imposed the harshest sanctions so far on Iran due to concerns over its nuclear program. The West worries that the program is for developing nuclear weapons, but Iran says it is for peaceful purposes.

Petraeus said the sanctions were having an impact.

"The sanctions have been biting much, much more literally in recent weeks than they have until this time," he said.

"What we have to see now is how does that play out, what is the level of popular discontent inside Iran, does that influence the strategic decision making of the Supreme Leader and the regime, keeping in mind that the regime's paramount goal in all that they do is their regime survival," Petraeus said.

(Reporting By Tabassum Zakaria; Editing by Sandra Maler and Jackie Frank)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (4)
RJZNYC wrote:
Wasn’t that the intention all along, to make the GCC richer while?

Jan 31, 2012 1:13pm EST  --  Report as abuse
W-DS wrote:
So..Saudi Arabia, which in the very near term will need oil prices to average $110/bbl minimum to support its projects is being relied upon to spite Iran?

All this does is guarantee the price of oil WILL rise, even if there isnt a single war occuring…and it will have zero effect on Iran, who will benefit from windfall profits, which will rise even more so once Saudi Arabia becomes greedy again and demands even more than their break-even budget price.

Iran will simply offer a discount of, say, 5-10% which guarantees the Asian countries will purchase from them.

The West/Europe will be cut off from the discounted oil, so effectively strangled by the rising prices; Iran also in turn makes more than it does currently even when factoring in the discount, a discount which in turn grants the Asian countries such as China/South Korea a bigger competitive advantage against small and medium sized Western firms.

In other words, Iran and Asia wins. The West loses.

Jan 31, 2012 3:28pm EST  --  Report as abuse
SvenBolin wrote:
All oil isn’t created equal. The refineries in Europe have problem with the Saudi oil.
All this US embargo nonsense will only hurt the EU economy and in the long run strengthen Asia and create new ways for oil exporters all over the world to bypass the petrodollar, in the long run destroying the US economy.

Jan 31, 2012 7:56pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.