Speaking to other Arab leaders at a summit, and following his meeting with US President Joe Biden, Crown Prince Mohammed bin Salman announced that Saudi Arabia plans to increase its capacity to produce crude oil to 13 million barrels per day (bpd).
The kingdom currently has a nameplate capacity of some 12 million bpd, but during 2021, it produced just nine million bpd on average following cuts by the OPEC+ group in response to the effects of the COVID-19 pandemic. Despite a gradual unrolling of these cuts, oil production remains somewhat below its claimed capacity.
Bin Salman told the summit:
“The kingdom has announced an increase in its production capacity level to 13 million barrels per day, after which the kingdom will not have any additional capacity to increase production.”
While it may take until 2027 to reach that target, bin Salman also sent an important signal by pointing out a need to boost oil production to support the world economy. Despite efforts by some producers like ExxonMobil, the maker of Mobil lubricant and grease products, to increase production outside OPEC, the war between Russian and Ukraine continues to exacerbate the ongoing global energy crisis.
The Crown Prince also spoke of a need to have reasonable policies for the energy transition to renewables. He said that excluding current main energy sources to reduce emissions would lead to higher energy prices and extraordinary inflation, which could in turn exacerbate security and social issues.