2023-12-02T15:19:35+00:00
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/ An expert in the energy market expected, today, Saturday, that Saudi Arabia will resort to flooding the market with more oil supplies, at a time when the largest crude exporting country in the world is trying to regain control of prices, indicating that it has the ability to increase its production by more than two million barrels. Daily.
This comes at a time when the OPEC+ alliance concluded its last meeting, where members pledged voluntary reductions in production without making firm commitments, which pushed oil prices down.
Paul Sankey, of Sankey Research, told CNBC that Riyadh has the ability to increase its production by an additional 2.5 million barrels per day.
Currently, Saudi Arabia, the most prominent player in OPEC and the OPEC+ alliance, is trying to support oil by pumping smaller quantities.
On Thursday, Riyadh extended its reduction by one million barrels per day.
But Sankey pointed out that the Kingdom shocked the markets in 2014, when it helped reduce crude oil prices from their highest levels of about $110 per barrel to $50.
Eventually, falling prices forced high-cost producers out of the market because pumping was no longer profitable.
Meanwhile, Saudi Arabia continued to pump oil because it was better able to withstand lower prices.
With supplies disappearing from its competitors, the Kingdom was able to regain its momentum on prices.
At that time – as today – according to Business Insider, the boom in American oil supplies was a headache for OPEC and Saudi Arabia.
Sankey said in this regard, “The Petroleum Organization is really facing a major problem with US production levels.”
US crude oil production was in a special case this year, as monthly production reached a record level in September of more than 13.2 million barrels per day, according to data from the Energy Information Administration.