Saudi Arabia, the world’s top oil exporter, plans to raise its crude oil production significantly above 10 million barrels per day (bpd) in April, after the collapse of the OPEC supply cut agreement with Russia.
The country’s oil giant Aramco will boost its crude output after the current OPEC cut deal expires at the end of March.
Aramco slashed its official selling price (OSP) for April for all its crude grades to all destinations, after OPEC’s oil supply cut pact with Russia fell apart sending oil into a tailspin.
April’s production will be significantly higher than 10 million bpd, possibly closer to 11 million bpd. Saudi Arabia has been pumping 9.7 million bpd in the past couple of months.
According to sources, Aramco is advised to maximize its output and sell more crude to protect its market share.
Saudi Arabia has an oil output capacity of 12 million bpd, giving it the ability to swiftly increase production.
A three-year pact between OPEC and Russia ended in acrimony after Moscow refused to support deeper oil cuts to cope with the outbreak of the coronavirus, and OPEC responded by removing all limits on its own production.
Oil prices plunged 10% as the development revived fears of a 2014 price crash, when Saudi Arabia and Russia fought for market share with U.S. shale oil producers, which have never participated in output-limiting pacts.
It is believed that Saudi Arabia who is not at war with the country is pursuing its own interest. Other countries are expected to raise production after every aspect has been resolved.