Bloomberg reports sources informed about Saudi Arabia’s output policy as saying that the country is preparing to pump a record-breaking 10.8 million barrels per day (bpd) in July. This would follow the recent OPEC deal where members agreed to relax production caps by a million bpd. At the meeting, Khalid Al-Falih, the Saudi Arabian Energy Minister, said his country would prioritize its customers by doing “whatever is necessary to
keep the market in balance”.
Saudi Arabia’s previous record for oil production was 10.72 million bpd in November 2016. Since January 2017, however, it has been limited to a quota of 10.058 million bpd as part the deal between OPEC and its non-member partners, although it has often undershot even this. Such a jump in production would clearly indicate the kingdom’s resolve to deliver on OPEC’s recent agreement to bring an extra million bpd of oil into the market.
The move towards increased production may head off criticism of the cartel from within the United States. President Trump expressed dissatisfaction with OPEC in a mid-April Tweet, while lawmakers in the US have revived the NOPEC act that seeks to bring the organisation under the Sherman antitrust law, something that was used to dismantle John Rockefeller’s oil empire more than a century ago.
The production increase is unlikely to surprise multinational oil companies, however. Speaking to CNBC in March last year, CEO Darren Woods of ExxonMobil, the oil producer behind Mobil UK stockists, said the company was planning to adapt quickly to any price movements in the OPEC-driven market.
