In the midst of a price war with Russia, Saudi Arabia announced on Monday its intention to bring its oil exports to the record level of 10.6 million barrels per day (mbd) in May.
"The kingdom intends to increase its oil exports by 600,000 barrels per day from May, which will bring its (total) exports to 10.6" mbj, said an official of the Ministry of Energy, quoted by the official SPA agency.
From 7 to 10 million barrels per day
This announcement by the world's leading exporter comes at a time when the pandemic of the new coronavirus has led to a drop in demand, helping to push down crude prices. The Saudi kingdom had already announced in early March an increase in its exports to 10 million barrels per day in April after the failure of negotiations on the renewal of a reduction in production between the Organization of the Petroleum Exporting Countries (OPEC) and Russia to support prices.
In response, Saudi Arabia cut prices sharply, flooding the market with low-cost barrels to gain additional market share. Saudi Arabia previously exported around 7 million barrels a day as part of a production reduction agreement between the cartel and its partners, including Russia.
Historically low levels
Ryad had also announced an increase in production for the month of April to 12.3 million barrels per day. The director general of the oil giant Saudi Aramco, Amin Nasser, said two weeks ago that the company could maintain its production at this level for at least 12 months without having to build new facilities. The United Arab Emirates has also pledged to pump at least an additional 1 million barrels per day starting next month, further exacerbating a price war that plunged black gold prices to their lowest level in 17 years.
Oil prices collapsed on Monday, following the fall of financial markets in the face of the worsening crisis linked to the Covid-19 pandemic. The price of a barrel of WTI, benchmark in the United States, fell to around 20 dollars a barrel, while that of a barrel of Brent from the North Sea was less than 23 dollars, levels more seen since the beginning of the years 2000.
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