IEA chief Birol not worried about Saudi oil supply cuts over journalist's death

By Osamu Tsukimori and Aaron Sheldrick

NAGOYA, Japan (Reuters) - International Energy Agency (IEA) chief Fatih Birol said on Monday he is not worried Saudi Arabia will cut oil supply in response to any potential sanctions over the killing of journalist Jamal Khashoggi, but urged common sense as political developments may impact energy markets.

"There are many geopolitical, non-energy related issues, which could also have further impact on the oil markets," Birol told Reuters, when asked about concerns in oil markets over whether Saudi Arabia, the world's biggest crude oil exporter, might retaliate against any punitive measures by global powers over Khashoggi's death in the Saudi consulate in Istanbul.

"There's a strong challenge for the key producers to increase production and comfort the markets. I appeal to all the producers and consumers to have common sense in the very difficult months we are entering," Birol said, speaking on the sidelines of an LNG conference in Nagoya, Japan.

He said he did not think that Saudi Arabia would cut production, but he has "significant worries" about the market because of falling supply from Venezuela and Iran amid strong demand growth.

Amid that supply-demand equation, Birol said, "There is potential we will see even higher prices than current ones and it comes, as it always does, at a bad time for the global economy."

Saudi Arabia on Sunday called the killing of journalist Jamal Khashoggi at its Istanbul consulate a "huge and grave mistake," but sought to shield its powerful crown prince from the widening crisis, saying Mohammed bin Salman had not been aware.

The comments from Foreign Minister Adel al-Jubeir were some of the most direct yet from Riyadh, which has given multiple and conflicting accounts about Khashoggi's killing on Oct. 2, first denying his death and later admitting it amid an international outcry.

(Reporting by Osamu Tsukimori; Editing by Richard Pullin and Kenneth Maxwell)