March 24, 2020 [Reuters – Published on March 19, 2020] – Saudi Aramco will continue reducing operations at its local refineries in April and May to boost the state energy company’s potential to export crude oil, a company official said on Thursday.
Saudi Arabia, the world’s top oil exporter, said on Wednesday it had directed Aramco (2222.SE) to keep supplying crude at a record rate of 12.3 million barrels per day (bpd) in the coming months.
Exports were set to top 10 million bpd from May, it added. On Monday Aramco said it would likely sustain higher oil output planned for April in May, and that it was “very comfortable” with crude at $30 a barrel, signaling it is prepared to live with low prices for a while.
It also plans to raise its oil production capacity to 13 million bpd.
Worldwide, refineries are slowing output and contemplating extensive maintenance because of travel restrictions put in place in response to the coronavirus pandemic.
Gasoline demand in the United States, the world’s largest oil consumer, is plunging. International flights are being grounded worldwide, slamming jet fuel demand.
Margins for producing transportation fuels turned negative in Europe and Asia and briefly did the same in the United States, in a rapid response to international and domestic travel restrictions in scores of nations worldwide.
Saudi Arabia has also taken drastic steps to try to slow down the spread of the virus, including suspending the Umrah pilgrimage, halting international flights, and closing schools and most public establishments.
The kingdom, which reported 67 new infections on Wednesday to bring its total to 238, has also suspended most private sector activities and cut its state budget by nearly 5%, as the outbreak and low oil prices threaten growth.
Oil prices have lost half their value in less than two weeks due to the coronavirus and a battle for market share between Saudi Arabia and Russia after the collapse of a global supply cut pact earlier this month.
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