Saudis pumping record amount of oil
Print Edition
Saudi Arabia said yesterday it will increase its crude-oil supply to record highs, raising the stakes in its price war with Russia and effectively rejecting Moscow鈥檚 overtures for new talks.
The clash of the two oil titans sparked a 25 percent slump in oil prices on Monday, triggering panic selling and heavy losses on Wall Street鈥檚 main stock indexes, already hit hard by the coronavirus epidemic.
Yesterday, Amin Nasser, chief executive of Saudi Aramco, said the oil giant will increase supply to 12.3 million barrels per day in April for customers inside the kingdom and abroad, 300,000 barrels above its maximum production capacity, indicating the company may also free up crude from storage.
Saudi Arabia has also agreed with Kuwait to resume output from jointly operated oil fields in the so-called Neutral Zone, production not accounted for under Aramco鈥檚 output capacity.
On Monday, US Treasury Secretary Steven Mnuchin told Russia鈥檚 ambassador to the United States that energy markets need to stay orderly amid rising concerns that extra supply from Saudi Arabia and Russia could trigger bankruptcies among US shale-oil producers.
Over the past few months, the Middle Eastern oil behemoth has been pumping 9.7 million barrels per day. The kingdom holds hundreds of millions of barrels in storage in order to supply oil above its production capacity.
Brent oil prices jumped 10 percent yesterday to just above US$37 per barrel following Russia Energy Minister Alexander Novak鈥檚 indication that Moscow is ready to discuss new measures with OPEC, effectively offering an olive branch to Riyadh. But Saudi Arabia鈥檚 Energy Minister Prince Abdulaziz bin Salman appeared to rebuff the idea.
鈥淚 fail to see the wisdom of holding meetings in May or June that would only demonstrate our failure to attend to what we should have done in a crisis like this and taking the necessary measures,鈥 he said.
Riyadh鈥檚 unprecedented hike in crude supply follows the collapse of talks between OPEC and other producers led by Russia, known as OPEC+.
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