Saudi Arabia's pledge to boost crude production by 1.3 million barrels per day on short notice is widely seen as a political gesture toward Washington rather than a purely market-driven response, analysts said Thursday.
With the US presidential election approaching in November 2004, the kingdom had clear incentive to prevent American gasoline prices from climbing further. President George W. Bush faced persistent allegations of unusually close ties to the Saudi royal family, including claims that Riyadh had agreed to raise output in exchange for help at the polls.
Oil Minister Ali al-Nuaimi announced the offer, citing surplus production capacity and the kingdom's readiness to meet international demand. Saudi Arabia supplied the United States with 1.5 million barrels per day in May alone, more than 17 percent of total Saudi output.
Analysts were skeptical the move would ease prices much. World crude benchmarks hit fresh records on Thursday: New York's main contract reached $45.50 a barrel and London Brent broke $42 for the first time, pushed higher by supply concerns in Iraq, Russia, and Venezuela. Peter Kemp of Energy Intelligence Group called global capacity "very tight" and warned that additional Saudi barrels might change little.
Historical summary. TurkishPress restated this AFP wire report, first published in August 2004, in its own words.