Saudi Arabia has pledged to boost oil production by more than 25% in April, when the OPEC-plus production agreement is due to expire. On March 10, the kingdom announced that it planned to supply the market with no less than 12.3 million barrels per day (bpd) next month.
This is a remarkable figure, given that it is higher than the maximum sustainable capacity of Saudi Aramco, the national oil company. Bloomberg pointed out, though, that Aramco could reach the target by tapping into its strategic inventories.
The announcement represents an escalation in Riyadh’s budding price war with Moscow, which scuttled the OPEC-plus deal last week. The Russian side has already hit back by declaring its intent to hike production levels by 500,000 bpd in April, a move that would push output up to a record high of 11.8 million bpd.
Jaafar Altaie, the managing director of Abu Dhabi-based consultancy Manaar Group, commented: “There is a significant amount of market posturing going on between Saudi Arabia and Russia. They’re both getting ready to fight a pretty aggressive price war.”