Aramco is ready to ramp up oil production to 12 million bpd whenever the Saudi government asks this of the company, CEO Amin Nasser said this weekend, as quoted by Arab News.
Speaking at the presentation of Aramco's second-quarter and first-half results, Nasser noted that global oil demand is exhibiting healthy growth, and more would be coming from Asia.
At the same time, the executive said he was worried about declining production rates at mature fields and the lack of investment in new oil exploration on a global scale.
In that, the Aramco chief executive echoed the concern of Saudi Energy Minister Abdulaziz bin Salman, who has repeatedly said that low investments in new oil production are the basis of higher oil prices.
Indeed, Aramco's Nasser said that next year could see 2 million bpd in additional global growth with no spare capacity to meet this higher demand.
In its latest Monthly Oil Market Report, OPEC forecast global oil demand growth at 3.1 million bpd this year, set to decline to 2.7 million bpd in 2023, with the total rising from about 100 million bpd in 2022 to 102.7 million bpd in 2023.
Saudi Arabia is the OPEC member with the greatest spare capacity, at least on paper, and Aramco earlier this year announced plans to boost what it calls Maximum Sustainable Capacity from the current level of 12 million bpd to 13 million bpd by 2027.
At the same time, the Saudis will not rush into production ramp-ups in anticipation of tighter oil markets. According to unnamed sources cited by Reuters earlier this month, Saudi Arabia and the UAE could increase their oil output significantly but would only do it if oil supply really tightened.
"With possibly no gas in Europe this winter, with a potential price cap on Russian oil sales in the New Year, we can't be throwing every barrel on the market at the moment," one of the sources explained.
By Irina Slav for Oilprice.com
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As with Russia i think the credit lines are being pulled and raging localized Wars and conflicts are now taking center stage just as is true in ahem *"Putin's Greater Russia"* ahem. Anyhow another brutal day for energy longs and hopefully much was learned by the US Industry when the futures price hit *MINUS* forty US Dollars during Lockdown, 2020.
So far the entire US energy seems to be exceptionally well run at the moment in point of fact so certainly a literal textbook example of higher prices creating more supply combined with lower demand creating now falling prices. This is of course very good news for the stabilization of US equity markets as well but not so much the truly remarkable "super bubble" in USA real estate of every type and in near every location.
If this latter point is true this does not bode well for a slew of all other commodities not just oil as so much of that price is tied to US Housing as indeed is credit creation in the USA as well.
Plus it's a roof over our head, too!
Maybe Washington DC should look into this matter!
Anyhow big headline if true as also appears true Russia is losing its War of Annihilation against Ukraine quite badly and indeed as Russia should.