* Saudi to fill "perceived or real" oil market gap
* Saudis say market balanced
* US, IEA say global spare capacity tight
(Adds comment from U.S. Senator Charles Schumer)
By Humeyra Pamuk and Amena Bakr
KUWAIT, March 14 Consuming nations won a
new pledge from OPEC leader Saudi Arabia on Wednesday to boost
oil supplies to help control prices and protect the global
economy from any loss of Iranian crude due to potential
Oil prices have climbed to $127 a barrel this year,
just $20 short of their all-time high, as tighter Western
sanctions on Iran threaten to choke off the country's exports.
High oil prices have prompted worries about their impact on
the global economy, creating a major headache for politicians
around the world including U.S. President Barack Obama, who
faces public anger over high gasoline prices during an election
Washington has urged ally Saudi Arabia to cover potential
shortages when new U.S. and European Union sanctions are
expected to reduce Iranian oil exports from July.
On Wednesday, veteran Saudi Oil Minister Ali al-Naimi told
the International Energy Forum, a major gathering of producer
and consumer nations, that the world's largest oil exporter
stood ready to fill any supply gap.
"Today the oil market is generally balanced and there is
ample production and refining capacity ... Saudi Arabia and
others remain poised to make good any shortfalls -- perceived or
real -- in crude oil supply," Naimi said in a speech, made
available to reporters.
The statement appeared to differ from previous comments by
Naimi, who has repeatedly said the kingdom was prepared to raise
production only if it saw increased demand from customers.
ERODING SUPPLY CUSHION
Naimi faced a flurry of calls for additional supply from
"We think the markets are tight. Therefore, we think there
is a need for more production," said U.S. Deputy Energy
Secretary Daniel Poneman. "Oil prices at current levels are so
high that it's not consistent with a sustained economic
British energy minister Charles Hendry took things a step
further: "What we are keen to do is to encourage those with
spare capacity to produce more," he told reporters. "We do want
to see the prices come down."
But both Poneman and the head of the energy agency for
industrialized nations, the International Energy Agency, Maria
van der Hoeven, said global spare capacity was tight, making it
hard to protect the market against supply shortages.
Saudi Arabia is the only producer with spare capacity at the
moment and oil importers will rely on Riyadh to fill the gap
should Iranian output and exports drop.
Iran produces below 3.5 million barrels per day and exports
around 2.2 million bpd to world markets.
Iran Oil Minister Rostam Ghasemi said Iranian oil exports
remain unchanged from 2011 even after oil majors Total
and Shell stopped buying crude as other customers
Saudi Arabia, already running close to record highs of about
10 million bpd, says it has the capacity to increase production
to 12.5 million bpd.
But such a move would fully erase the crucial supply cushion
and may provoke an even higher spike in prices.
"There is a thin cushion, so there is concern about supply,"
said van der Hoeven.
Poneman said spare capacity of 2.5 million bpd was at least
1 million below reasonably comfortable levels seen in 2008-2011.
"Nobody wants to see a repeat of 2008, where you had a high
spike leading to global demand destruction," he said.
In Washington, surging gasoline prices have become a top
issue leading up to national elections in November.
Republicans have argued Obama should take steps to increase
U.S. oil production before asking Saudi Arabia for more, while
Democrats have blamed speculators for part of the run-up.
"The number one thing jacking up prices right now is the
fear in the markets that Iran will shut off its production,"
said Senator Charles Schumer in a speech on the Senate floor.
Schumer, the third-ranking Democrat in the U.S. Senate, had
urged the Obama administration to press the Saudis to boost
production, and said the announcement could help reduce oil
prices in the short term.
Although the stand-off between the West and Iran is the key
worry for oil markets at the moment, the tensions appeared to be
a taboo subject at the forum.
Saudi Arabia is also keen to minimize tensions with Iran,
which the West accuses of developing a nuclear weapon. Tehran
denies the accusations and says its atomic programme is
Neither Naimi nor OPEC Secretary General Abdalla al-Badri
mentioned the tensions in their speeches, and Ghasemi only
vaguely alluded to the stand-off.
"Exerting unilateral economic constraints of political
instigations is a threat, which jeopardizes free trade and
continuity of oil supply in the world," he said.
(Additional reporting by Sylvia Westall and Peg Mackey, and
Roberta Rampton in Washington; Writing by Dmitry Zhdannikov;
editing by Jane Baird)