ADNOC will announce forward prices for March and April 2020 shortly in response to market conditions/Bloombergby Kudakwashe Muzoriwa
Saudi Aramco will increase its production capacity by 8.3 per cent to 13 million barrels per day (bpd) following the collapse of an alliance between the Organisation of Petroleum Exporting Countries and Russia (OPEC+).
Abu Dhabi National Oil Company (ADNOC) also announced plans to boasts its crude supply to more than four million bpd starting April 2020.
HE Dr. Sultan Ahmed Al Jaber, ADNOC’s Group CEO, said, “In line with our production capacity growth strategy announced by the Supreme Petroleum Council, we are in a position to supply the market with over four million bpd in April. In addition, we will accelerate our planned five million bpd capacity target.”
The pledge for higher output follows promises by Saudi Arabia and Russia to ramp up supply after the collapse of talks between the OPEC+ last week, triggering a pump-at-will race once the alliance’s current supply deal ends this month.
In a bourse statement, Saudi Aramco announced that it received a directive from the Ministry of Energy to increase its maximum sustainable capacity from 12 million bpd to 13 million bpd.
According to the Saudi Press Agency, Amin Nasser, the President and CEO of Saudi Aramco, said that the state-owned energy giant is exerting its maximum efforts to implement this directive as soon as possible.
ADNOC will also announce forward prices for March and April 2020 shortly in response to market conditions and to provide better forward visibility to our customers. The Abu Dhabi oil producer said the decision has been made to ensure that its customers have visibility of the price so they can plan accordingly.
Oil plunged as much as 31 per cent after Saudi Arabia and Russia traded shots in an oil price and supply war that threatens to overwhelm markets already reeling from the impact of the coronavirus outbreak on demand. Similarly, shares in Saudi Aramco declined as much as 1.6 per cent in trading on Tadawul.
Saudi Arabia has more spare capacity than Russia and that cushion has long enabled it to play a dominant role among producers. Adding supply in times of shortage can dampen price spikes and the Kingdom is showing now that they can wield that power to exert financial pressure on other producers.
Saudi Arabia announced plans more than a decade ago to boost and sustain its capacity at a level of 12 million barrels a day, and it has worked to maintain that by expanding fields including Manifa and Shaybah. In 2018, Khalid Al-Falih, the former Saudi Energy Minister, said that adding one million barrels a day of additional spare capacity would cost more than $20 billion.