Saudi energy ministry instructs Aramco to supply 12.3 mil b/d crude in coming months

Dubai — Saudi Arabia's Ministry of Energy has instructed Aramco to continue to supply 12.3 million b/d of crude to the market "during the coming months," according to an announcement on the official SPA news agency.

This is an expansion on its directive earlier this month for the company to supply 12.3 million b/d of crude to the market in April, once its OPEC production quota expires -- some 25% above current levels, as the kingdom shows no signs of backing down in its price war with Russia.

Aramco can pump crude at its maximum 12 million b/d capacity for a year without any new investment, its CEO said earlier this week. The remaining 300,000 b/d will be drawn from the company's vast global storage network.

Since the three-year OPEC+ production cut agreement collapsed on March 6, Saudi Aramco has slashed its selling prices for crude exports and announced plans for a surge in production. The moves have contributed to a massive rout in crude prices, with the market already weakened by the impact on demand of the coronavirus outbreak.

Aramco, which has exclusive rights to produce all the crude within Saudi Arabia's borders, has never reported monthly production higher than the 11.09 million b/d it achieved in November 2018, and its ability to achieve its full capacity is untested.