Saudi Arabia announced plans to increase oil exports to over 10 million barrels a day as the OPEC’s key member state plunged into a price war with Russia.
On March 18, Saudi Arabia announced plans to increase oil exports to over 10 million barrels a day as the key member state of the Organization of Petroleum Exporting Countries (OPEC) plunged into the oil price war with Russia.
Saudi Arabia said it was ready to add 250,000 barrels a day to exports by increasing the utilization of gas for domestic oil consumption.
“Saudi Arabia will utilize the gas produced from the Fadhili gas plant to compensate for around 250,000 barrels a day of domestic oil consumption, which will enable the Kingdom to increase its crude exports during the coming few months to exceed 10 million barrels a day,” the kingdom’s Energy Ministry said in a statement.
Saudi Arabia is by far find measures to diversify the energy industry by increasing gas and renewable energy production to gain oil exports – the country’s main source of income.
The new decision came last week after the world’s top exporter, Saudi Arabia, decided to hike production by at least 2.5 million barrels a day to a record 12.3 million from April.
Despite declining global oil demand as a result of the COVID-19 epidemic, Saudi Arabia’s decision to increase production and boost oil exports stemmed mainly from a price war with Russia that the best oil export in the world but outside of OPEC.
OPEC and allies, led by Russia, failed to reach an agreement to cut production in the early of this month, raising concerns about the escalation of the price war.
Energy analyst Carsten Fritsch of Commerzbank Research said that while demand is falling due to tightening restrictions to prevent the spread of the disease, the actions of Saudi Arabia and Russia can be attributed to “self-destructive action.”
Meanwhile, oil prices continued to decline in the session on March 17, as concerns of the spread of COVID-19 will reduce the demand that has put pressure on the market.
West Texas Intermediate oil prices for April delivery fell $ 1.75, or 6.1%, to close at $ 26.95 / barrel on the New York Commodity Exchange, while Brent oil prices in May fell 1.32 USD, or 4.39%, down to 28.73 USD / barrel on London ICE Futures.
Traders are increasingly concerned about the great risk of oil demand due to the impact of the COVID-19.