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Oil major ExxonMobil has not…

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The Oil Collapse Isn’t Over Yet

Welcome to $30 Oil, But It Could Be Lower 

Last week, Saudi Arabia threatened to flood the market with oil. This week, it did just that. 

Aramco has been ordered to raise output capacity to 13 million bpd (from 12 million bpd), and it’s also going to slash its selling price by $6-$8 per barrel. Aramco will also load 300,000 bpd more for its customers in April, raising exports for the month to 12.3 million bpd.

If you thought the market was bad before this, consider that Aramco’s highest known production rate was 11.9 million bpd (back in November of 2018). 

The UAE is also boosting production by 1 million bpd, and capacity by the same, while adding a 15% discount to prices - but what it really wants is for the Saudis to back down.  

But as we speak, the Saudis are shoring up their market share in Russia’s European backyard, with the first cut-rate shipment heading for the continent as of late Wednesday. They’re hoping to supply European refineries with three times as much crude as usual. And refineries are biting, of course, because of the major discount which works out to be about $25/barrel, pricing out Russia’s Ural’s. 

Russia is fighting back with its own production increase threats (between 200,000 bpd and 300,000 bpd in the short term, and 500,000 bpd longer term). 

For the market, it’s the worst oil price crash since the 1990s. On Monday, prices sunk…






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