*Osama Suleiman from Vienna
The US Forbes report confirmed that Saudi Arabia has already returned to the management of the crude oil market again, as the international market looks to it as a ready-made alternative oil producer, particularly in times of crisis, such as the current times.
The report pointed out that Saudi Arabia is able to raise production quickly through its enormous reserve capacity in order to stabilize the market and calm the oil prices.
The report said that the role of Saudi Arabia is not new to it, as it has done so much throughout the history of the crude oil industry.
It pointed out that in September 2016, the consensus was led to a reduction in production in cooperation with independent producers to counter the rise of the US oil and to stimulate prices to recover in favor of the oil market.
The report stressed that Saudi Arabia welcomes the gradual increase in productivity in the coming months in response to appeals from the United States and India to calm prices and secure oil supply due to the current and projected sharp declines in Venezuela and Iran in particular.
The report expected Saudi production to rise gradually over the next year to record - according to some international estimates - 12 million barrels per day in view of the consensus of producers and consumers on the need for more oil in the markets as the recent increase approved by OPEC was insufficient to secure supply and meet the growing consumption needs.
The report said that the increase in Saudi production of large size has become an inevitable step required by the market using the backup power to avoid crises of disruption of supplies. It expected the loss of the Iranian production because of the US sanctions about one million barrels per day.
Venezuelan production is expected to lose 500,000 barrels per day in the next few months, as well as about 350,000 bpd would be dropping from the Canadian oil due to its repeated setbacks.
The report highlighted Saudi-US relations. It what prompts the US President Donald Trump to impose tough sanctions on Tehran as he was confident that Saudi Arabia would be able to compensate for supply shortfalls by increasing crude oil extraction.
Following the Saudi Arabia's success in implementing the 18-month cut, production returned to record highs last month to break the 10 million bpd.
It is expected to complement growth as part of international demands for increased oil supplies after an expected contraction in the supply of Venezuela and Iran.
Saudi Arabia's oil production stood at 9.868 million bpd in April compared to 9.83 million barrels per day in January compared to 10.010 million bpd in July 2017.
Production rose to 10.03 million bpd last month, after OPEC's decision to increase production last month in cooperation with producers outside the organization.
In the context of the price of crude oil, it rose due to the worsening Libyan production situation and the declaration of force majeure, as well as continued concerns over the impact of the US sanctions on Iran to stabilize the supply of oil in the markets.
The rise in prices is curbed by the OPEC-led increase in cooperation with non-OPEC allies and a relative slowdown in demand for crude oil.
"The production crises continue in Venezuela, Iran and finally in Libya, which deepens concerns about supply," said Thorsten Anderbo, the Honorary General Secretary of the World Gas Association, to the Economist.
However, the Saudi intervention came in a strong and timely manner. Saudi Arabia's increased production compensated for all of these declines and the combined production of the OPEC countries remained stable at the same level, according to June data.
It pointed out that the oil and gas sectors expect a large growth in demand, which poses challenges to increase investment to compensate for loss of production in many countries, in addition to natural depletion in the fields that is estimated at 5 per cent.
It expects gas demand to grow by as much as 50 percent in less than a decade.
Robert Stehrer, director of the Vienna Institute for International Economic Studies, said that Saudi production last month achieved the largest monthly increase since 2013, estimated at 330,000 barrels per day.
It comes in response to high domestic demand in the summer, as well as meeting the growing needs of consumers.
He pointed out that the Saudi oil policies to calm prices are going at a good pace through gradual increases expected to ease the pressure on the international economy.
He stressed the success of Saudi Arabia in bridging the gap caused by the impact of the US sanctions on Iran, which is likely to be more severe than the previous sanctions, and may drop sharply and fast level of Iranian oil exports.
Reinhold Guthier, director of the oil and gas sector at Siemens Global, said that Saudi Arabia alone is capable of compensating all Iranian exports even if they reach zero.
"It is enough to know that India, one of the world's largest consumers of crude oil, has a plan to diversify its crude oil resources and prepare available alternatives," he said.
He added that the Saudi and Iraqi oil will be the closest to cover all the consumption needs in the expanding Indian market, which is characterized by rapid growth rates.
He believed that the production of "OPEC" in general will not be affected, but will record new continued increases, while the problems remain worsening within some Member States.
In terms of prices, oil prices rose yesterday, after Libya declared force majeure in some of its exports of crude, while the loss of Canadian supplies contributed to raise the price of the US crude to the highest level in three and a half years.
The US crude jumped 90 cents, 1.2 percent, to reach $ 74.84 a barrel, the highest level since November 2014, before cutting its gains to $ 74.74, up 80 cents by 10:00 GMT.
