Saudi Arabia plans to boost oil exports to a record above 10 million barrels a day from May as the kingdom taps a new field, an official at the Ministry of Energy said.
The export boost shows Saudi Arabia is determined to carry on with its policy of pumping-at-will after Russia walked out from the OPEC+ alliance. Moscow and Riyadh are engaged now in a price war that has sent Brent crude, the global benchmark, below $30 a barrel and prompted energy companies to announce big spending cuts.
“The Kingdom of Saudi Arabia will utilize the gas produced from the Fadhili gas plant to compensate for around 250,000 barrels a day of domestic oil consumption, which will enable the Kingdom to increase its crude exports during the coming few months to exceed 10 million barrels a day,” the official said, asking not be identified discussing the plan publicly.
Saudi Arabia has told refiners it plans to produce 12.3 million barrels a day in April, a record, although the kingdom hasn’t said how much oil it will export during the month. According to the International Energy Agency, Saudi Arabia consumes an average of 3.15 million barrels a day, suggesting that exports would be capped at slightly above 9.15 million barrels a day.
In a sign that the kingdom is preparing for a long battle, despite the heavy economic cost, state-owned oil giant Saudi Aramco on Monday indicated that Riyadh could weather cheap oil.
“We are very comfortable with $30,” Khalid Al-Dabbagh, the finance director of Aramco, told investors March 16 during the company’s maiden annual results conference call. “In a nutshell, Saudi Aramco can sustain very low oil prices and can sustain it for a long time and that is, especially the case compared to others in the sector,” he added.
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