S/Arabia to boost oil output, escalating price war with Russia

S/Arabia to boost oil output, escalating price war with Russia

Oil

Riyadh/Moscow, March 10, 2020 (dpa/NAN) Saudi Arabia’s oil giant Aramco on Tuesday said it would increase its production to 12.3 million Barrels Per Day (bpd) in April, up 300,000 bpd from its current maximum.

The announcement appears targeted at Riyadh’s rival producer, Russia, as the two sides engage in an escalating oil price war even as the global crude market is swamped with supplies.

Aramco, in a statement on the website of Riyadh’s Tadawul stock market, said “the company has agreed with its customers to provide them with such volumes starting April 1, 2020.

“It expects that this will have a positive, long-term financial effect’’.

Oil prices have been falling since Friday, when petroleum heavyweight Saudi Arabia failed to win Russia’s support for a 24-country deal to slash global oil supplies.

At talks earlier, the 14-member Organisation of Petroleum Exporting Countries (OPEC), which is dominated by Saudi Arabia, had proposed an output cut of 1.5 million barrels per day, or around 1.5 per cent of global production.

It said the project is to be implemented by OPEC as well as a Russia-led group of 10 allied oil exporters.

However, the discussions in Vienna, which were meant to bolster prices that have been under pressure because of  coronavirus epidemic, ended without agreement.

Then, in what looked like a revenge move to hurt Russian oil revenues, wealthy Saudi Arabia cut its selling price for oil on the weekend, sending global benchmark prices down 30 per cent at their lows.

Russia said it is considering increasing its oil production by 200,000 or even 300,000 barrels per day, despite the price plunge.

Russian Energy Minister Alexander Novak said in comments carried by state news agency TASS “I think that in the short term we can increase by 200,000-300,000 barrels in the near future 500,000 barrels.’’

Oil prices rose by more than 3 dollars after markets opened but still traded between 30 and 40 dollars per barrel, significantly lower than last week.

Aramco has seen its shares drop by 10 per cent as Riyadh stock market opened on Monday, halting trading.

Aramco shares were up 9.7 per cent in trading on the Tadawul to 31.10 riyals (8.28 dollars). (dpa/NAN)

HLM/MST

Edited by Hadiza Mohammed/Muhammad Suleiman Tola