Saudi Arabia increase oil output to record high

DUBAI, United Arab Emirates (AP) – Saudi Arabia’s state-run oil giant Saudi Aramco said yesterday it would increase its crude oil production to 12.3 million barrels a day in April, a record amount.

The move seems to make good on the country’s promise over the weekend to increase output after Russia refused to cooperate on cutting production. That led to a 25 per cent plunge in the price of crude on Monday, the sharpest decline seen since the 1991 Gulf War. International benchmark Brent crude traded up over seven per cent yesterday at nearly USD37 a barrel.

In a filing made yesterday on Riyadh’s Tadawul stock market, Aramco — formally known as the Saudi Arabian Oil Co — said that the increase in production represented a rise of 300,000 barrels per day.

“The company has agreed with its customers to provide them with such volumes starting April 1, 2020,” it said in the filing. “The company expects that this will have a positive, long-term financial effect.”

Saudi Aramco shares were up 9.7 per cent in trading yesterday on the Tadawul to 30.95 riyals, or USD8.25, giving the world’s most-valuable company a valuation of USD1.65 trillion.

It came a day after Aramco shares collapsed by 10 per cent and were pulled from trading for reaching the Tadawul’s maximum permitted loss in a day, dropping its valuation to USD1.4 trillion. Aramco had offered only a sliver of its shares on the Tadawul for investors.

Aramco’s decision likely will flood global energy markets and put further pressure on prices. The company had reached USD2 trillion in early days of trading in December.

Saudi state television later quoted Energy Minister Prince Abdulaziz bin Salman as saying the kingdom didn’t see the need for an OPEC meeting in May and June.

A security person wears a mask as he checks vehicles entering a compound for Saudi Aramco in Jeddah, Saudi Arabia. PHOTO: AP