World’s largest oil exporter is also offering unprecedented discounts to entice purchasers. FMTNews Saudi
DUBAI: Saudi Arabia plans to increase oil output next month, going well above 10 million barrels a day, as the kingdom responds aggressively to the collapse of its Opec+ alliance with Russia.
With demand being ravaged by the coronavirus outbreak, opening the taps like that would throw oil market into chaos. Brent crude, the global oil benchmark, closed down 9.4% on Friday, its biggest daily drop since the global financial crisis in 2008, settling at US$45.27 a barrel. Aramco has set the prices, but the official communication to clients is likely to come on Monday, a person familiar with the matter said.Last month, Saudi Arabia not only implemented the Opec+ output cuts, but “voluntarily” restrained its production even further in an effort to lift prices. When the Opec+ deal expires in three weeks, Riyadh will be able to pump as much as it wants.
In contrast, Urals, the Russian flagship crude blend, trades at a discount of about US$2 a barrel under Brent. Traders said the Saudi move was a direct attack at the ability of Russian companies to sell crude in Europe.
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