Saudi Arabia – and OPEC in general – may lose leadership of the global oil market

Analysts at the BMI Research said the potential of shale oil in the United States is still largely unknown and that the oil prospects form Iran, Libya and Venezuela are Doubtful. Analysts say Saudi Arabia is reluctant to use its surplus production capacity to supply the market.

In a report sent by analysts to Rigzone, “there are questions about the extent to which Saudi Arabia can increase its oil production to compensate for shortages elsewhere in the market.”

“Saudi Arabia has the capacity to keep the market sufficiently saturated, but the material costs will outweigh the benefits,” the report adds.

The Kingdom asserts that it has a surplus oil production capacity of 2 million barrels per day, which means it has a total production capacity of about 12 million barrels per day. Analysts said full use would be enough to keep the markets well oil-saturated and prices under control.

“However, the surplus production capacity and its entry into force will cost a lot, while the production will take some time to bring information on the Internet in full; analysts added that the increase in crude production from 11 million to 12 million barrels per day is likely to take Between six and 12 months to fully increase, and it is unclear that there will be a market for additional barrels, as well as doubts about the sustainability of this market.

Analysts added that Saudi Arabia and OPEC in general would lose key leadership in the global oil market, which would leave prices highly vulnerable in the event of an additional supply shock.

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