Saudi Arabia Reportedly Considers ‘Opening the Taps’ Over Flopped OPEC+ Deal to Slash Oil Output

Earlier, crude prices went into a tailspin on the news of the OPEC+ abolishing oil production restrictions over a lack of consensus regarding the cartel’s suggestion to cut crude output.

Saudi Arabia is hatching plans to increase its oil output in April to over 10 million barrels a day in the wake of the failure of OPEC+ to forge an alliance with Russia on slashing oil output, reports Bloomberg.

The world’s number one oil exporter is believed to have revealed its preparedness to raise production to 12 million barrels a day – a record amount – if need be, the outlet reported, citing sources familiar with the matter.

Bloomberg quoted an anonymous commodities hedge fund manager as saying:

The outlet cited a hedge fund investor Doug King as adding:

Saudi ‘Price War’

On Saturday Saudi Arabia slashed the official selling price for its crude grades to all destinations as of April, after OPEC’s oil supply cut deal with Russia and other countries fell through.

State oil giant Aramco was offering its flagship light crude oil to Asia at a discount of $3.10 to the Oman/Dubai average, a drop of $6 a barrel from March, according to a copy of the prices reportedly seen by Bloomberg News.

Similarly, the April official selling price of its Arab light crude oil to the US was at a discount of $3.75 per barrel – down $7 a barrel, while the discount for crude to Northwestern Europe stood at $10.25 per barrel to Ice Brent, down $8 a barrel.

Collapsed OPEC+ Talks

The shock discounts and reports of a Saudi production hike come after negotiations between OPEC+ members on Friday suggesting the need to further decrease oil production amid the outbreak of the coronavirus, officially known as COVID-19, fell through.

Russian Energy minister Alexander Novak rejected an ultimatum on 6 March in Vienna at the OPEC+ meeting to join in a collective production cut. After the collapsed talks, Novak said countries were free to pump-at-will from the end of March.

A banner gives safety instructions to advise people how to protect against a coronavirus infetion at the foyer of the OPEC building before the 178th meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna, Austria, on March 5, 2020

Russian Minister of Energy Alexander Novak

The Russian Energy minister added:

Novak confirmed that the OPEC+ will continue working as outlined in the long-term cooperation charter.

Russia’s oil output increase will now hinge on companies’ plans, but no negotiations have been held between the companies and the Energy Ministry so far, added the minister.

Oil prices accelerated their fall to 8.5 percent on the news, with Brent crude falling below $46 per barrel for the first time since June 2017.

Sourse: sputniknews.com