Saudi Arabia will continue to supply a record 12.3 million barrels per day (bpd) to the oil market in the coming months, as per order from the energy ministry, the official Saudi Press Agency reported on Wednesday.
“Ministry of Energy directed Saudi Aramco to continue to supply crude oil at a level of 12.3 mbd over the coming months,” reads the brief statement as the Kingdom is intent on unleashing growing crude oil volumes on the market, aiming to significantly boost its crude oil exports to a record-breaking more than 10 million bpd in May.
The Saudis, who launched an all-out price war for market share with Russia after Moscow refused to back deeper cuts, will not only boost April exports from the current 7 million bpd, but will also grow exports in May by another 250,000 bpd from April.
After the collapse of the OPEC+ production cut deal, OPEC’s de facto leader and the world’s top oil exporter, Saudi Arabia, promised to flood the market with crude oil as of April 1, sending oil prices into a tailspin and weighing heavily on the market which is being battered by an unprecedented demand shock amid the coronavirus pandemic.
The Saudis have promised 12.3 million bpd oil supply in April, after more than three years of holding back supply as part of the OPEC+ deal. The abrupt end to the OPEC-Russia coalition earlier this month triggered an all-out price war between the former allies which now vow production increases to regain market shares and possibly grab shares from one another.
Meanwhile, Saudi Aramco claims that it is “very comfortable” with $30 oil.
There is no end in sight to the current Saudi Arabia-Russian standoff, ING strategists Warren Patterson and Wenyu Yao said on Wednesday as oil prices continued to tumble to multi-year lows.
“That said, the only thing that will likely bring them back to the discussion table is even lower prices,” ING said.
WTI Crude had plunged 9 percent to $24.83 a barrel at 9:15 a.m. EDT—the lowest level in more than 17 years, while Brent Crude was down 5 percent to $28.84.
By noon, WTI had slumped by 13.79% to $23.56.
By Tsvetana Paraskova for Oilprice.com
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