NEW YORK — As crude oil prices reached a nine-month high on concerns about Iran’s nuclear program, Saudi Arabia has increased its crude exports, and the U.S. is pondering releasing oil from its Strategic Petroleum Reserve, according to media reports Saturday.
Saudi Arabia, the world’s biggest oil exporter, has increased production in the past week and offered additional output to its largest customers to contain prices, Reuters reported.
The kingdom has said publicly that it would increase its output to cover any shortfall to the world supply from Iranian exports, Reuters reported.
The newswire, citing unnamed industry sources, said that Saudi Arabia had increased exports to just over 9 million barrels a day the week before, compared with an average of about 7.5 million in January. Reuters said it wasn’t clear if the export numbers were the start of a longer Saudi supply addition or a temporary move.
Crude-oil prices rose to more than $125 a barrel after the United Nations’ nuclear watchdog flagged the potential military threat of Iran’s nuclear program, Reuters said, adding the U.N. aborted an inspection mission to Iran this past week.
Iran’s customers in Europe and Asia have already curbed their buying from the world’s fifth-largest crude exporter because of U.S. sanctions on Iran’s oil buyers, as well as a European Union oil embargo to begin July 1, Reuters reported.
According to AAA, average U.S. regular gasoline prices had risen to $3.674 a gallon as of Saturday. The average was $3.38 a month ago and $3.29 a year ago.
Treasury Secretary Timothy Geithner said on CNBC television on Friday that an improving economy and Iran “saber-rattling” were behind the recent rise in oil prices.
He said the administration would continue to look at tapping the strategic petroleum reserve but emphasized that there’s “no quick fix,” language President Barack Obama used in a key speech on Thursday. Geithner also said the White House was looking to ensure alternative supplies from Saudi Arabia if needed.
Europe, which imports about 700,000 barrels per day from Iran, would suffer more directly from the cutoff of Iranian crude than would the U.S., which doesn’t buy oil from Tehran. But the knock-on effect of a disruption would drive prices higher around the globe, Reuters reported.
The U.S. Strategic Petroleum Reserve has enough capacity to cover U.S. needs for about 40 days, Reuters reported, adding that the government most recently tapped into the reserve after Libya’s civil war.