Saudi Arabia to hike oil output capacity by 1 million barrels per day

Aramco will boost its crude oil output capacity by one million barrels per day, taking the overall daily figure to a potential 13 million, Deutsche Welle reported on Wednesday.

"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 bpd," the company said in a statement to the Saudi Stock Exchange.

A day earlier, the oil company said it will increase its output by 300,000 barrels per day from April 1 but will now appear to be upping the ante further by increasing its capability by another 700,000.

Aramco did not say when the additional boost will occur. The Saudi firm is locked in a dispute with Russia, which has also said it is considering increasing its output as oil prices continue to fluctuate due to the acrimony.

Oil prices on Monday fell by over 30 per cent, the biggest fall since the 1991 Gulf War after Saudi Arabia slashed its export oil prices over the weekend in retaliation to Russia's refusal to agree to further production cuts.

The Organisation of the Petroleum Exporting Countries (OPEC) are hoping to broker an agreement whereby both scale down their outputs.

OPEC's concerns are that a drastic increase in oil distribution will flood global energy markets and place further pressure on prices.

Meanwhile, Russian Energy Minister Alexander Novak said discussions are continuing with OPEC and that Moscow will send a representative to the organisation's joint technical committee meeting in Vienna on March 18.

Novak also raised concerns about the market's unpredictability due to the coronavirus outbreak, according to Deutsche Welle.

Russian President Vladimir Putin said he was optimistic common sense will prevail and that there is no need to panic.

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