US, WASHINGTON (NEWS OBSERVATORY) — The giant Saudi oil group, Saudi Aramco, announced on Tuesday to increase its production significantly to 12.3 million barrels per day in April, in the midst of a “price war” that the Kingdom started with Russia after the oil countries failed to reach an agreement to continue reducing production.
The Saudi Stock Exchange website “Tadawul” stated that “Saudi Aramco will provide its customers with 12.3 million barrels per day in April.”
Saudi Arabia, the largest oil exporter in the world, was producing about 9.8 million barrels per day, which means that it will increase its production by about 2.5 million barrels per day starting in April.
“It was agreed with its customers to provide them with these quantities from the beginning of the month of April. The company expects a positive financial impact in the long run,” the statement added.
Saudi Arabia says that its maximum production capacity is 12 million barrels per day, but without knowing its sustainability.
Saudi Arabia also maintains strategic reserves of tens of millions of barrels of crude oil for use in times of need and is expected to be used to provide additional production.
Saudi Arabia has already reduced its oil prices to all of its customers worldwide starting from next month after the Organization of Petroleum Exporting Countries and its allies, most notably Russia, on Friday failed to reach an understanding of an additional reduction in crude production to reduce the impact of the emerging Coronavirus.
Russia, the largest oil producer outside OPEC, has refused to cut production.
In response to the Russian position, Saudi Arabia reduced the prices of its oil for sale to its lowest level in 20 years, in an attempt to secure a large market share, which sparked turmoil in the energy markets.
As oil prices witnessed the largest decline since the Gulf War in 1991, analysts warn that this step will continue to push prices down about $ 20 a barrel if the two sides do not reach an agreement.
Riyadh floated the shares of giant Aramco, the world’s largest company, for trading last December.
But the company’s stock lost 10 percent of its value Monday.
At the beginning of this month, Gulf stock markets declined sharply, against the backdrop of the economic effects of the spread of the new Corona virus, which panicked global markets, but returned and recorded a strong recovery on Tuesday.
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