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Bloomberg
Saudi Arabia plans to boost oil output next month to well above 10 million barrels a day, as the kingdom responds to the collapse of its Opec+ alliance with Russia.
The world’s largest oil exporter engaged in an all-out price war by slashing pricing for its crude by the most in more than 30 years. State energy giant Saudi Aramco is offering unprecedented discounts in Asia, Europe and the US to attract refiners to use Saudi crude.
At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record 12 million barrels a day, according to reports. With demand ravaged by coronavirus outbreak, opening the taps would throw the oil market into chaos.
“Saudi Arabia is now really going into a full price war,†said Iman Nasseri, managing director for the Middle East at oil consultant FGE. The Saudi Energy ministry didn’t respond to a request for comment.
Aramco’s unprecedented pricing move came just hours after the talks between the Organisation of Petroleum Exporting Countries (Opec) and its allies ended in dramatic failure. The breakup of the alliance effectively ends the cooperation between Saudi Arabia and Russia that has underpinned oil prices since 2016. Production limits agreed to by Opec and its erstwhile partners expire at the end of the month, opening the way for producers to ramp up output.