The kingdom has for years taken it upon itself to hold most of the world's spare production capacity.
We have only the word of the Saudis to support the idea that they do have spare production capacity.
The Saudis had 1.5 million bpd of spare production capacity--oil spigots on standby--and it was less desirable heavy crude.
An earlier attempt, in 1967, failed because the U.S. had spare production capacity.
Strong global demand, inadequate spare production capacity, and threatened interruptions in the flow of oil from big suppliers Iran and Nigeria kept prices high this week.
He notes that it will take time to rebuild spare production capacity, especially when world oil demand is growing by 2m bpd or more a year.
Saudi Arabia has its own version of a strategic petroleum reserve, in the form of spare production capacity, which could make up for most if not all Iranian exports.
This would, vitally, eliminate all the global spare oil production capacity.
Aramco already has proved capable of increasing production, still with spare capacity of a couple of million barrels per day.
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And apart from Saudi Arabia, which remains by far the world's biggest supplier, few in Opec have either much of a stomach for increasing production - or much capacity to spare.
The kingdom has about 4 million bpd of spare capacity and can cushion further blows to production.
That spare capacity has all but disappeared, largely because production outside OPEC has been disappointing.
Spare capacity is the ability of oil producers to jump-start new production within one month and keep it going for three months.
But the manufacturing sector has little spare capacity, and high interest rates and scarce power may deter the investment needed to raise production.
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