Oil plunged as much as 31% on Monday after Saudi Arabia and Russia ignited an oil price and supply war
Saudi Aramco plans to boost its oil-output capacity for the first time in a decade as the world’s biggest exporter raises the stakes in a price and supply war with Russia and US shale producers.
Aramco will raise its production capacity to 13 million barrels a day from 12 million, the state company said Wednesday in a statement. It didn’t specify when it would reach the higher capacity.
The oil giant said it will increase capacity at the order of the country’s energy ministry.
“The company is exerting its maximum efforts to implement this directive as soon as possible,” Aramco chief executive officer Amin Nasser said in a separate statement.
Oil plunged as much as 31% on Monday after Saudi Arabia and Russia ignited an oil price and supply war that threatens to overwhelm a market already reeling from the impact of the coronavirus outbreak on global demand.
Aramco said Tuesday it will supply 12.3 million barrels of crude a day to the market starting on April 1 - more than its current capacity. Russia responded by saying it had the ability to add 500,000 barrels a day in supply.
Saudi Arabia has a bigger cushion of spare production capacity than Russia. The kingdom announced plans more than a decade ago to boost and sustain its capacity at a level of 12 million barrels a day, and it has worked to maintain that by expanding fields including Manifa and Shaybah.