Saudis Announced a Record Increase in Oil Supplies

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Saudi Arabia promised to “tap” its strategic oil inventories and pledged to deliver a record 12.3 million barrels. The largest oil company in the world, owned by Saudi Arabia - Saudi Aramco - has announced a record increase in oil supplies since April. It is reported by Bloomberg. “Saudi Arabia escalated its oil price war with Russia on Tuesday, as its state-owned company (Saudi Aramco - ed.) pledged to supply a record 12.3 million barrels a day next month, a massive increase to flood the market,” the statement reads. According to media reports, this is 300 thousand bps higher than the maximum capacity of the company. Aramco has agreed with customers to provide these volumes from April 1. As noted, such an increase in supplies - more than 25% more than last month - exceeds the company’s maximum capacity. The publication writes that this indicates that the kingdom is tapping its strategic inventories in order to maximize the supply of crude oil to the market as soon as possible. In response, Russian Energy Minister Alexander Novak said that Russia could increase oil production by 500 thousand barrels per day, which would be a record - at the level of 11.8 million barrels per day. But unlike Saudi Arabia, Russia has no strategic reserves. Other members of the Organization of Petroleum Exporting Countries (OPEC) followed in their wake, with Iraq saying it would increase shipments by as much as 350 thousand barrels per day next month, and Nigeria adding more than 100 thousand barrels. The Financial Times cites the economist Olivier Jakob at Petromatrix, a research company specializing in the oil market. According to him, Saudi Arabia is pursuing a “shock and awe” strategy to demonstrate that it is able to increase supplies faster than any other manufacturer. “Saudi Arabia is going all in on trying to disrupt the oil market ... Over the weekend, they signaled a price war, and now this has gone straight to the war. The market does not need that much crude oil,” he said. Note that after the collapse of a third the day before, futures for Brent crude on the London Stock Exchange ICE Futures on March 10 increased by 6.29% - to $ 36.43 per barrel. April WTI crude oil quotes on the New York Mercantile Exchange NYMEX jumped by 6.3% - to $ 33.08 per barrel. The collapse in the oil market provoked a fall in global stock markets, as well as exchange rates in Russia, Kazakhstan and other oil-producing countries.