Saudi Arabia to Increase Petroleum Exports Disagreement between Russia and Saudi Arabia continues to affect oil price. Saudi Arabia has announced that it will increase oil production after a disagreement with Russia. With the increase in oil production in the market and the decrease in oil consumption due to the coronavirus, the oil price fell to the lowest level in 17 years.
Some experts think that the fall in oil prices may continue for a while. Because Saudi Arabia has no intention of reducing oil production.
A government official in Saudi Arabia announced that the country would increase oil exports, Reuters reported. Saudi Arabia will export an additional 600,000 barrels of oil a day, starting in May, according to him.
While Saudi Arabia normally produces electricity with crude oil, it has also started to use natural gas resources in Al Fadili. This significantly reduced Saudi Arabia’s oil consumption. On top of that, people started not to go out because of the coronavirus, and oil consumption throughout the country has decreased.
Officials in Saudi Arabia decided to increase both oil production and oil exports. According to Reuters, Saudi Aramco will produce 12.3 million barrels of oil per day starting in May, and 10.6 million barrels of it will be exported.
Price May Fall
There is already surplus in the oil market. In the article we shared the other day, we talked about this situation and talked about how big a crisis this might have caused. If Saudi Arabia already increases production when there is surplus and demand is low, the price of oil may fall well.
Fatih Birol, head of the International Energy Agency (IEA), says that now 3 billion citizens around the world are quarantining themselves and not going out unless they have to. Birol, one of the leading names in the energy sector, thinks that the demand in the oil market may decrease by 20% as a result.
If there is a decrease in the current demand, this may trigger a very sharp decline in the oil market. In such a scenario, the price of barrels of oil can go much lower than $ 20.