Saudi Arabia will increase its maximum production capacity to 13 million barrels per day

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Riyadh- Saudi Aramco announced today, Wednesday, that it will increase the maximum production capacity by one million barrels of oil per day to reach 13 million, in the midst of a “price war” raging with Russia.
Aramco said in a statement posted on the Saudi Stock Exchange website, “Tadawul”, that it had received “a directive from the Ministry of Energy to raise the level of maximum sustainable production capacity from 12 to 13 million barrels per day.”
Usually increasing production capacity requires years and investments in billions of dollars.
The move came a day after Saudi Arabia, the world’s largest oil exporter, announced to increase production significantly to 12.3 million bpd in April from the current 9,8 million bpd.
Saudi Arabia maintains strategic reserves of tens of millions of barrels of crude oil, and it is expected to resort to it to cover the amount of oil that exceeds its maximum production capacity next month, which is 300 thousand barrels per day.
The “OPEC” group, led by Saudi Arabia, Russia and other oil countries, had in the past two years cut production to raise the declining oil prices since 2014, within the framework of cooperation under the name of “OPEC Plus”.
Saudi Arabia, during a meeting in Vienna this month, called for an additional reduction in order to face the sharp drop in prices due to the spread of the new Corona virus, but Russia refused this.
In response to the Russian position, Saudi Arabia reduced its oil prices to its lowest level in 20 years, in an attempt to seize a large market share, which sparked turmoil in the energy markets and a raging price war.
While oil prices have witnessed the largest decline since the Gulf War in 1991, analysts warn that this step will continue to push prices down about $ 20 a barrel if the two sides do not reach an agreement.
Russian Energy Minister Alexander Novak said Tuesday that Moscow may boost production in the short term, but at the same time it has opened the door to the possibility of new talks with the kingdom. – (AFP)





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