Aramco to boost oil output

Riyadh: Energy giant Saudi Aramco said on Wednesday it plans to raise its crude production capacity by one million barrels per day to 13 million bpd as a price war with Russia intensifies.

The decision came a day after Saudi Arabia, the world´s top exporter, decided to hike production by at least 2.5 million bpd to a record 12.3 million from April, and prompted sharp new falls in world prices.

"Saudi Aramco announces that it received a directive from the ministry of energy to increase its maximum sustainable capacity from 12 million bpd to 13 million bpd," the company said in a statement to the Saudi Stock Exchange.

CEO Amin al-Naser said Aramco would dedicate all of its resources to achieving the increased capacity quickly. Boosting production capacity normally takes a long time and requires billions of dollars of investment.

Several years ago, the kingdom shelved plans to boost its crude production capacity beyond 12 million bpd after demand for OPEC oil declined in the face of stiff competition from North American shale oil and other sources.

The Saudi moves come after the collapse of an oil production reduction agreement between OPEC and non-OPEC producers, including Russia.

The deal proposed by Saudi Arabia called for additional output cuts of 1.5 million bpd to cope with the severe economic impact of the coronavirus which has sharply reduced world demand for crude. Oil prices fell heavily on Wednesday on news of the Saudi decision to raise output capacity, reversing gains made earlier in the day.