Saudi Arabian oil minister Ali al-Naimi declared that high oil prices are “unjustified” on Wednesday, assuring the market that the kingdom can boost crude production to offset any shortfall in exports from Iran.

The Brent crude price has risen 15 per cent since the start of the year to about $124 a barrel as the market prepares for the effects of Europe’s embargo on Iranian oil and reacts to Tehran’s threat to close off the Strait of Hormuz.

Speaking at a press briefing Doha, Al-Naimi said that the situation was different to the 2008 peak, when Brent crude reached a record $147 a barrel, as there is plenty of spare capacity.

Saudi Arabia is expected to produce about 9.9 million barrels a day (b/d) in March and April, with the capacity to increase production to 12.5 b/d if required by OPEC, the minister said.

An EU embargo against oil from Iran, which was enforced from 24 January, could significantly impact the country’s exports. Iran is OPEC’s second largest oil producer after Saudi Arabia, reportedly producing about 3.7 million b/d in January.