Saudi will supply the global market with as much as 12.3 million barrels of crude oil per day next month as it plots an escalation of its price war following a collapse of a production containment deal between OPEC and Russia that was meant to stabilise the market.
Oil market immediately reacted, with prices losing some of Tuesday’s gain and this could inflict more woes on economies like Nigeria’s that could easily collapse into another recession it the price war is prolonged.
The new supply plans by the Saudis will be about 2.5m barrels a day above what the country was previously producing, suggesting that the kingdom will take barrels from storage in order to flood the global market as it takes on rivals in a fight for market share.
Saudi Aramco has said it has spoken with customers and agreed to supply them with these new levels starting from April, according to one person familiar with the matter.
The kingdom on Saturday said it would slash the export prices for its crude, triggering an oil price crash of as much as 30% – the biggest one-day drop since the Gulf war in the early 1990s.
The crash on Monday roiled global financial markets and forced oil dependent Nigeria to scramble for response in the face of an imminent fiscal and foreign currency crises.
