Saudi Arabia, the world’s top oil exporter, plans to raise its crude oil production significantly above 10 million barrels per day (bpd) in April, after the collapse of the OPEC supply cut agreement with Russia, two sources told Reuters on Sunday.
State oil giant Aramco will boost its crude output after the current OPEC+ cut deal expires at the end of March, the sources said.
On Saturday, Aramco slashed its official selling price (OSP) for April for all its crude grades to all destinations, after OPEC’s oil supply cut pact with Russia fell apart on Friday, sending oil into a tailspin.
The sources said that April’s production will be significantly higher than 10 million bpd, possibly closer to 11 million bpd.
Saudi Arabia has been pumping 9.7 million bpd in the past couple of months.
Aramco should maximize its output and sell more crude to protect its market share, the sources said.
Saudi Arabia has an oil output capacity of 12 million bpd, giving it the ability to swiftly increase production.
A three-year pact between OPEC and Russia ended in acrimony on Friday after Moscow refused to support deeper oil cuts to cope with the outbreak of the coronavirus and OPEC responded by removing all limits on its own production.
Oil prices plunged 10% as the development revived fears of a 2014 price crash, when Saudi Arabia and Russia fought for market share with U.S. shale oil producers, which have never participated in output-limiting pacts.
“The kingdom is not at war with anyone, but it is pursuing its own interest. Once the deal expires, everyone will raise production,” said the second source.