Record Saudi oil output needed to avoid global supply shortfall.

FT: “The US might be drowning in oil, but the world is still dependent on Saudi Arabia. Indeed, Saudi Arabia is pumping out more crude than at any time since at least the 1970s. In neighbouring Kuwait and the United Arab Emirates meanwhile, oil production levels hit record highs. These numbers reflect a profound but easily overlooked trend in the global oil market.” “In spite of the shale oil revolution in the US, the world has become, if anything, more dependent on a handful of Gulf producers to fill supply shortfalls elsewhere.
Saudi Arabia has responded by pushing output to 10.2m barrels a day in August, according to the International Energy Agency, the most in IEA records. The country is now reaping more than $1bn a day in export revenues.
….For consuming nations such as the US, the world’s largest crude importer, India and China, the question is whether these Gulf states have enough spare capacity to keep pumping at these levels – or even raise production should disruption last?
The IEA estimates that even when producing at current levels, Saudi Arabia still has more than 2mb/d of spare production capacity.
….By factoring in Manifa output, the IEA has raised its estimate of Saudi output capacity by more than 500,000 b/d this year, to 12.5 mb/d. That provides some buffer to the market, and means the IEA is hopeful that the current tightness in the oil market will ease over the next few months, as refineries are shut for maintenance.
….For all the talk about the shale boom, then, it is business as usual for the rest of the world in terms of supply. The market will be watching those output data closely.”