Saudi Arabia aims to further increase oil production in the next two months, touching a peak of more than 10 million barrels a day as the kingdom explores a new field, a spokesperson for the Kingdom's Ministry of Energy said on Tuesday.
"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 spokesperson said.
The boost in exports follows rising tensions in oil markets following a breakdown in talks between the Organization of Petroleum Exporting Countries (OPEC) and Russia on March 6 to secure a further oil output cut. Futures of Brent and WTI crude have plummeted to under $30 per barrel, as fears of an imminent price war between producers became a reality.
The coronavirus pandemic is causing weak global oil consumption and low economic activity around the world. Saudi-led OPEC and Russia-led non-OPEC failed to agree a deal during their latest meeting on March 6 to provide deeper cuts in their oil production levels.
The following Friday on March 13, crude oil prices recorded an almost 20% weekly loss, and posted the largest weekly decline in 29 years due to coronavirus-related low demand coupled with the risk of growing oversupply.
Saudi Arabia's state-run oil company, Saudi Aramco, announced last week that it would raise its crude oil supply to 12.3 million barrels per day in April.
According to the International Energy Agency (IEA), Saudi Arabia absorbs an average of 3.15 million barrels a day, indicating that production would be around 9.15 million barrels a day. However, the new gas plant will allow the Kingdom to raise exports beyond that amount.
By Sibel Morrow