Saudi Arabia, Bahrain point to downstream deficits

Saudi Arabia, Bahrain point to downstream deficits

London, 16 May (Argus) — A lack of refining capacity and demand means any increases to Opec+ crude production beyond what is in process would be pointless, according to two of the group's Mideast Gulf producers.

The 19-nation coalition has faced calls to speed its output increases, even though it is falling short of its overall targets, with rising prices for refined products threatening economic growth in large consuming nations. But Saudi Arabia and Bahrain today, 16 May, sought to push the reason for those high prices into the downstream sector.

"There is no refining capacity commensurate with the current demand and the expectation… of the demand this summer, when people go to gasoline, diesel, and what have you, for their transportation," Saudi energy minister Price Abdulaziz bin Salman said at an energy conference in Bahrain. He noted increases in refining margins that, for diesel notably, have reached record highs.

"With all the… clamour of what is happening to oil prices, look who is picking the tab," he said. "[The] OECD and the G7."

Bahrain's oil minister Sheikh Mohammed bin Khalifa al-Khalifa said producing more crude is pointless without the demand for it.

"The market is well supplied… so if you increase [crude output], where