The United Arab Emirates joined Saudi Arabia on Wednesday in promising to raise oil output to a record high in April, as the two Gulf Arab oil producers in OPEC took a united stand in a standoff with Russia that has hammered global crude prices, Reuters informs.
The extra oil the two Gulf allies plan to add is equivalent to 3.6% of global supplies and will pour into a market at a time when global fuel demand in 2020 is forecast to contract for the first time in almost a decade due to the coronavirus outbreak.
Oil prices have almost halved since the start of the year on fears OPEC states would flood the market in its battle with Russia after Moscow refused to agree last week to deep production cuts in a pact that has propped up prices since 2016.
Saudi Arabia, which has already announced it would hike supplies to a record 12.3 million barrels per day (bpd) in April, said on Wednesday it would boost production capacity for the first time in more than a decade.
UAE national oil company ADNOC said in its announcement that it would raise crude supply to more than 4 million bpd in April and would accelerate plans to boost its capacity to 5 million bpd, a target it previously planned to achieve by 2030.
By raising supplies, Riyadh and Abu Dhabi will add a combined 3.6 million bpd of extra oil in April to a market already awash with crude, compared to their existing output that is limited by the pact with Russia that expires in March.
Adding to that, Moscow has said Russian oil companies might boost output by up to 300,000 bpd and could increase it by as much as 500,000 bpd.
State-run Saudi Aramco plans to raise capacity to 13 million bpd from 12 million bpd, Chief Executive Amin Nasser said, adding that the move was ordered by the Energy Ministry.