• PyR.What is behind Russia's strategy with oil and why has it broken the deck?
  • Macroeconomics: Coronavirus unleashes the biggest drop in oil prices in 29 years

After a black Monday, Saudi oil giant Aramco announced on Tuesday an increase in its production by 300,000 barrels of crude oil per day from next month, in the middle of a price war with Russia and with the coronavirus crisis curbing the economic expectations of the largest producer of OPEC (Organization of Petroleum Exporting Countries).

In a statement sent to Tadawul, the stock market of Saudi Arabia, the most profitable company on the planet has advanced that its level of production will experience " an increase of 300,000 barrels per day over its maximum capacity of 12 million ." "The company has agreed with its clients to provide this volume as of April 1, 2020. This is expected to have a positive long-term financial effect," the note details.

Last Friday, Russia, at the head of the group of OPEC allied countries, refused to extend the agreement signed three years ago to maintain cuts in crude supplies. On Monday, the price of oil registered a collapse of 25%, the most pronounced since the Gulf War in 1991 . Riad then promised to increase its production, which during 2019 had remained below 10 million barrels per day.

In the Saudi parquet, in which it has been present since last December starred in the largest public operation of sale of shares in history, Aramco shares have recovered this Tuesday from the shock of the day before, when they lost 10% of their value and its quotation was temporarily suspended when it exceeded the maximum allowed fall.

The titles of the oil company, whose price has been frozen briefly before the announcement of the production, have closed with a rise of 9.88 percent to $ 8.30. Some data that place their value at 1.66 billion, below that obtained on its IPO and the 2 billion that it registered during the first trading days of the securities.

According to the information provided to its customers, Aramco will offer a discount of between 4 and 8 dollars per barrel. Your client portfolio in northwestern Europe and the United States will benefit from the biggest discounts . The measure of the state oil company will double the pressure on prices, in its challenge launched against Moscow. In response, Russia has advanced on Tuesday that it has a similar measure and that it could be able to increase its production to half a million barrels a day "in the near future . "

Precisely the Saudi Energy Minister, Prince Abdelaziz bin Salman, has acknowledged Tuesday that he sees no use in holding OPEC meetings and his allies between May and June if current circumstances persist. "It would only show our failure to address what we should have done in a crisis like this and take the necessary measures," he told Reuters.

Trump conversation

On Monday, Crown Prince Mohamed bin Salman discussed the clouds in the global energy market in a telephone conversation with US President Donald Trump. The economic horizon of the kingdom, immersed in the reforms designed by Crown Prince Mohamed bin Salman, is not at all promising. The first quarter of the year is marked by the stagnation of oil production, the largest fall in the private non-oil sector in 22 months and the first consequences of the coronavirus in industry and tourism.

In its monthly report, published on Tuesday, the consultancy FocusEconomics admits that the outlook for the Saudi economy has worsened , at an international juncture marked by the ravages of the coronavirus and the reduction of economic activity. Panelists estimate that Saudi Arabia's growth will be around 1.6 percent, two tenths below the projection outlined last month.

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