On March 10, the energy titan Saudi Aramco announced to boost crude oil supplies to 12.3 million barrels per day inApril. The Aramco claimed that “The company has agreed with its customers to provide them with such volumes starting 1 April 2020. The company expects that this will have a positive, long-term financial effect.” The world’s biggest crude exporter has been pumping some 9.8 million BPD, which means it will be adding at least 2.5 million BPD from April. The hike in oil prices will raise the stakes in a standoff with Russia. The clash of oil titans Saudi Arabia and Russia sparked a 25% slump in crude prices, triggering panic selling on Wall Street and other equity markets that have already been badly hit by the coronavirus outbreak.
Moscow claimed that Russian oil companies might uplift output by up to 300,000 BPD and could increase it by 500,000 BPD, sending the Russian rouble and stocks plunging. On the other hand, Riyadh has already slashed the price of its oil to all parts of the world starting from April after OPEC and its allies. However, the calculations suggest that Saudi Arabia can generate enough revenue with the excess supply. It is being suggested that a 9m barrel production at $50 per barrel earns $450 million a day while 12.3 million at a much lower crude price of $38 will fetch $476 million a day in revenues.