The move seemed to make good on the country’s promise over the weekend to increase output after Russia refused to cooperate on cutting production.
Source: Associated Press
Aramco refinery at Ras Tannura, Saudi Arabia. (AP Photo)
DUBAI: Saudi Arabia’s oil company Aramco said Wednesday it will increase production capacity to 13 million barrels per day, up from 12 million per day.
The majority state-owned company’s announcement, made on the Saudi Tadawul stock exchange, did not say when that capacity increase would happen.
Aramco says the decision to increase capacity was a directive to the company from the Saudi Energy Ministry.
On Tuesday, Aramco had said it would increase its crude oil production to 12.3 million barrels a day in April, a record amount.
The move seemed to make good on the country’s promise over the weekend to increase output after Russia refused to cooperate on cutting production. That led to a 25% plunge in the price of crude on Monday, the sharpest decline seen since the 1991 Gulf War. International benchmark Brent crude traded up more than 8% Tuesday over $37 a barrel.
Aramco’s decisions will likely flood global energy markets and put further pressure on prices. The company had reached $2 trillion in the early days of trading in December.
The lower oil prices come as there’s less demand for air travel amid the spread of the new coronavirus around the world, further depressing prices. However, that likely will push down gasoline prices at the pump for Americans. On average, a gallon of regular unleaded in the U.S. sold for $2.36 a gallon, according to AAA, down from $2.43 a month ago.
Russian Energy Minister Alexander Novak had sought to project confidence on Tuesday, saying in an interview broadcast by Russian state television that “despite the decrease of prices and volatility that we are witnessing today, our sector stays competitive.”