Saudi Aramco Has Gone The Other Way And Boosted Production

The coVID-19 outbreak has led to a collapse in oil demand and depressed international oil prices, leading many energy suppliers around the world to reduce crude production and cut exploration projects. But Saudi Aramco, Saudi Aramco, is taking the opposite tack, adding capacity and using its strength to crush rivals "to be the winner".

Aramco intends to raise its daily crude output from 12 million barrels to 13 million barrels a day, Reuters reported Wednesday, citing industry sources and energy analysts. "We expect oil demand growth to resume in the longer term, driven by population growth and economic growth," Aramco said in a statement to Reuters.

Saudi Arabia is moving forward with its "Vision 2030" economic reform plan aimed at diversifying the country's economy away from oil. Analysts cautioned that oil revenues would continue to support the reform plan.

The move comes as energy giants such as BP PLC and Shell PLC plan to cut crude oil production in favor of more investment in renewable and clean energy.

An industry insider said: "Under the current international economic situation, energy diversification is not expected to be fully realized until at least 2030. It will take at least 50 years for a large economy like Saudi Arabia to 'wean itself off' oil. So the money is still in oil, "he said.

In addition, Aramco is adjusting its downstream expansion plans, instead seeking to acquire existing refineries and petrochemical plants in countries such as India, rather than building new plants from scratch.

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