Saudi Arabia intends to significantly increase oil production
Saudi Arabia plans to significantly increase oil production and offered customers a significant discount. In fact, Riyadh intends to start a “price war” in the oil market, reports RBC-Ukraine with reference to Bloomberg.
The relevant decision of Saudi Arabia adopted after the failure of negotiations with other OPEC producing countries, primarily with Russia. A preliminary agreement on the reduction of oil production ends in March, and the new contract no.
Stated that Riyadh has sent to customers in Asia, USA and Europe offers significant discounts to get them to buy Saudi oil. The state-owned company Saudi Aramco has already sent the customer a document which informs about the reduction of prices by 6-8 per barrel.
To increase oil production is planned to more than 10 million barrels a day, and if necessary, to a record 12. Given the fact that the outbreak of coronavirus and so lowered the demand for oil, such actions by Saudi Arabia can “create chaos” in the oil market.
Oil traders believe that the purpose of these actions is Saudi Arabia – to prevent Russia to sell its oil in Europe and return it to the negotiating table.