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Wednesday Apr 01 2020
By
Web Desk

Oil price war feared as Saudi output jacked up to maximum, OPEC deal expires

By
Web Desk
An oil platform is seen in the North Sea, east of Aberdeen, Scotland, February 24, 2014. REUTERS/Andy Buchanan/Files

DUBAI/KARACHI: Saudi Arabia's oil supply shot up to more than 12 million barrels per day (bpd), industry insiders and international media outlets reported, giving rise to the fears of an imminent price war.

The development came as a global agreement between the Organization of the Petroleum Exporting Countries (OPEC) and Russia expired, while the Kingdom chose to ignore US President Donald Trump's offer to mediate.

Reuters said two oil industry sources had confirmed that the supply from Saudi Arabia had surged despite no indication from the Kingdom as to how much crude oil would go into storage amid global demand destruction due to the spread of the coronavirus epidemic.

Earlier in the day, Trump had said he may consider joining talks between Saudi Arabia and Russia over a steep decline in oil prices caused by the two countries.

"I am joining at the appropriate time if need be,” he had said, adding that he had had “great” talks in separate conversations with Saudi Crown Prince Mohammed bin Salman and Russia's Vladimir Putin.

The restrictions, part of the OPEC deal, were to limit the output by the oil producing countries. The Kingdom had only informed that oil exports would be at around 10 million bpd.

State oil giant Saudi Aramco had yesterday asked major energy service companies to stand with its plans to put oil supply on full throttle, at the 12mbpd capacity "starting April 1 and for the foreseeable future", an industry source noted, and advised them to further raise it to 13mbpd.