Saudi Arabia, the United States and Russia can between them raise global output in the next 18 months to compensate for falling oil supplies from Iran and elsewhere, US Energy Secretary Rick Perry said on a visit to Moscow on Friday. US sanctions on Iran's oil exports, which come into force in November, have already cut supply back to two-year lows, while falling Venezuelan output and unplanned outages elsewhere could push up crude prices, hurting consumers.
But Perry, in an interview with Reuters, said he felt comfortable about the outlook for global crude output, and for oil prices. "I don't foresee spikes," Perry said, although he added there was always the potential for unforeseen events. Some analysts have expressed concerns about Saudi Arabia's long-term ability to significantly boost output.
But Perry said: "There's a number of things going on in the kingdom that continue to give me a very positive feeling about their ability to maintain their level and even increase their level" of crude production. He cited the prospect that Kuwait and Saudi Arabia would soon resolve a border dispute, unlocking access to an oil field in a contested area. "They are working towards a solution in the not too distant future," he said.
On US production, which has already been growing over the past few years, Perry said: "You look out 18 months, and I think you'll see even a more substantial increase in the United States because of pipeline capacity being built out." Russia, meanwhile, was "working diligently" to deliver its oil output to the world market, Perry said.
Perry was in Moscow for talks with his Russian counterpart, Energy Minister Alexander Novak. Visits by senior US officials are a rarity after relations between Moscow and Washington nosedived, first over the Ukraine crisis and later over allegations of Russian meddling in the US presidential election.