| DUBAI, April 3
DUBAI, April 3 Saudi Arabia is likely to
maintain high oil production in the event consumer countries
release emergency stocks, but it will not seek to lure buyers
for more oil by discounting its crude, industry sources said.
U.S. Secretary of State Hillary Clinton on Saturday in
Riyadh sought an assurance from Saudi King Abdullah that the
kingdom would not neutralise a release of inventories by
consuming countries by cutting its production.
Saudi officials told the U.S. delegation a drawdown was
"unnecessary" but said the kingdom would continue to meet global
oil market demand if the United States and allies went ahead, an
industry source familiar with the matter told Reuters.
"Saudi production will unlikely change from the levels we
see now, even if the stocks are released because the stocks will
not have an impact," another source familiar with the talks
"Everyone knows that Aramco is a commercial operation and it
will not discount oil," he added, in reference to oil sales by
the Saudi state oil company.
The United States with Britain and France is considering a
release from strategic reserves and is seeking cooperation from
other consumer countries.
Saudi Arabia has repeatedly said it is meeting customer
needs and that it is ready to meet any extra requirements. A
European Union embargo and U.S. financial sanctions on Iran are
expected to deepen a decline in Iran's oil sales over the next
few months. Saudi is the only producer with spare capacity.
"Aramco meets the needs of its customers whether an embargo
is in place or whether a strategic stock is used," Saudi Deputy
Oil Minister Abdul Aziz Bin Salman bin Abdulaziz told reporters
in Dhahran on Tuesday.
"The use of stocks or the embargo are both sovereign
decisions and we do not want to be part of a zero-sum game."
Riyadh has long avoided pushing down oil prices by offering
deeper discounts for its crudes in an effort to encourage
refiners to store more crude.
Last June, the International Energy Agency (IEA) group of
major consuming countries released stocks when prices rose
during civil war in Libya.
Saudi Arabia kept its output more or less steady after the
announcement but then cut supplies as oil from consumer stocks
reached the market.
Saudi pumped 9.85-9.90 million barrels per day from July to
September, before falling to just over 9.40 million bpd in
October and November. It has since risen steadily back to about
9.90 million bpd.
Saudi Oil Minister Ali al-Naimi last month said the kingdom
had met all its customers' requests for oil and stood ready to
raise output to full capacity of 12.5 million barrels per day
(bpd), if needed.
Saudi oil output: link.reuters.com/vyt93s
Saudi oil inventories: link.reuters.com/tyx37s
Saudi oil prices: link.reuters.com/gaw47s
(Additional Reporting by Reem Shamseddine; editing by Daniel
Fineren and Keiron Henderson)