Saudi Aramco chief sounds alarm over global oil capacity

Saudi Aramco chief sounds alarm over global oil capacity

Global oil markets remain incredibly tight, the chief executive of the world’s biggest crude producer has warned, as he said the world was too focused on the demand impact of a possible recession rather than the limitations of current supply.

The comments from Amin Nasser, chief executive of Saudi Aramco, come as oil producer group Opec, headed by Saudi Arabia, prepares to announce what is expected to be a substantial cut to production on Wednesday to boost oil prices and preserve spare production capacity, particularly in the Gulf kingdom.

Riyadh fears that Russian output could fall sharply later this year when western sanctions against the country’s oil exports tighten, and is keen to keep some spare production capacity in reserve, according to people familiar with Saudi Arabia’s thinking.

Speaking at the Energy Intelligence Forum in London, Nasser said current oil prices, which have fallen to less than $90 a barrel from a high of $139 earlier this year, reflected a market focused “on short-term economics rather than supply fundamentals”.Under-investment meant that global spare capacity, defined as extra crude supply that could be brought online quickly in the event of unforeseen incidents, remained “extremely low” and would be “completely eroded” if China relaxed its