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Saudi, U.A.E. promise flood of crude as oil resumes slide

The battle for control of the global oil market intensified again on Wednesday as Saudi Arabia promised to increase production capacity and the United Arab Emirates said it plans to pump as much as possible next month.

 

Riyadh said it will boost capacity to an unprecedented 13 million barrels a day, doubling down on Tuesday’s pledge of extra output in April. The U.A.E., a close Saudi ally, then promised to push more crude to customers than it can produce.

The moves come after an alliance between the OPEC cartel — effectively headed by the Gulf nations — and Russia collapsed acrimoniously last week. Russia, for its part, has announced that it will retaliate by activating additional supplies of its own.

The Saudi energy ministry, headed by Prince Mohammed’s half-brother, ordered Saudi Aramco to boost its output capacity by 1 million barrels a day, the first increase in at least a decade.

Saudi Arabia’s plan “isn’t the best option” in the current market, Russian Energy Minister Alexander Novak told reporters in Moscow.

Abu Dhabi National Oil Co. will supply 4 million barrels a day of crude to customers in April, it said on Wednesday. That would mean adding more than 1 million barrels a day to what the U.A.E. pumped in February. The country’s output capacity is 3.5 million barrels a day, according to the International Energy Agency.

Saudi Arabia and its allies are also slashing prices for their oil in an attempt to push out Russian crude and secure market share. Iraq and Kuwait followed Aramco in cutting rates to customers all over the world.

DIPO OLADEHINDE

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