Saudi Arabia Orders Oil Production Capacity Increase
2020-03-12
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1Saudi Arabia has directed the state oil company Aramco to increase its total possible oil production, or capacity.
2It announced the move at the Saudi Tadawul stock exchange Wednesday.
3A short time later, Abu Dhabi's oil and gas company ADNOC said it was increasing production by 25 percent to 4 million barrels per day.
4Saudi Arabia is working to flood the market after another oil producer, Russia, refused to agree to oil production cuts.
5Worldwide, demand for oil is decreasing as the spread of the new coronavirus has interfered with travel, transport and other industries.
6Saudi Arabia said earlier this week it would increase its oil production to 12.3 million barrels a day starting in April.
7That is 300,000 barrels per day more than Aramco's current production.
8Now the company says it will produce up to 13 million barrels per day.
9Aramco also said Wednesday that the Saudi Energy Ministry, led by Crown Prince Mohammed bin Salman, ordered the increase.
10Saudi Arabia had been producing around 9.8 million barrels per day.
11That amount was in line with an agreement among a number of oil producing nations, including Russia.
12The cuts were an attempt to stop the oversupply in the market that had pushed prices down.
13However, a few days ago, the kingdom's policy changed completely when Russia refused to go along with deeper cuts.
14Saudi Arabia is a member of the Organization of Petroleum Exporting Countries, or OPEC.
15It is expected that other members of that group will also increase production.
16Abu Dhabi's ADNOC on Wednesday said it would increase output from about 3 million barrels to over 4 million barrels of oil a day starting in April.
17In addition, the company said it would move up its plans for a 5 million barrels a day production goal.
18ADNOC said its plan to increase production was made in reaction to the market.
19Experts say it appears Saudi Arabia hopes to pressure Russia by controlling market share in a price war.
20The price of unprocessed, or crude oil went down 25 percent on Monday.
21It was the sharpest decrease since the 1991 Gulf War.
22By yesterday, the price had increased a small amount.
23By the end of trading, oil was at $36 a barrel.
24Eurasia Group is a private business that researches and advises clients about political risk.
25It describes the current oil situation as a crisis that could last "several weeks or months, until prices are low enough to change fundamental views in Moscow and Riyadh" and force a compromise.
26I'm Susan Shand.
1Saudi Arabia has directed the state oil company Aramco to increase its total possible oil production, or capacity. It announced the move at the Saudi Tadawul stock exchange Wednesday. 2A short time later, Abu Dhabi's oil and gas company ADNOC said it was increasing production by 25 percent to 4 million barrels per day. 3Saudi Arabia is working to flood the market after another oil producer, Russia, refused to agree to oil production cuts. 4Worldwide, demand for oil is decreasing as the spread of the new coronavirus has interfered with travel, transport and other industries. 5Saudi Arabia said earlier this week it would increase its oil production to 12.3 million barrels a day starting in April. That is 300,000 barrels per day more than Aramco's current production. Now the company says it will produce up to 13 million barrels per day. 6Aramco also said Wednesday that the Saudi Energy Ministry, led by Crown Prince Mohammed bin Salman, ordered the increase. 7Saudi Arabia had been producing around 9.8 million barrels per day. That amount was in line with an agreement among a number of oil producing nations, including Russia. The cuts were an attempt to stop the oversupply in the market that had pushed prices down. 8However, a few days ago, the kingdom's policy changed completely when Russia refused to go along with deeper cuts. 9Saudi Arabia is a member of the Organization of Petroleum Exporting Countries, or OPEC. It is expected that other members of that group will also increase production. 10Abu Dhabi's ADNOC on Wednesday said it would increase output from about 3 million barrels to over 4 million barrels of oil a day starting in April. In addition, the company said it would move up its plans for a 5 million barrels a day production goal. ADNOC said its plan to increase production was made in reaction to the market. 11Experts say it appears Saudi Arabia hopes to pressure Russia by controlling market share in a price war. 12The price of unprocessed, or crude oil went down 25 percent on Monday. It was the sharpest decrease since the 1991 Gulf War. By yesterday, the price had increased a small amount. By the end of trading, oil was at $36 a barrel. 13Eurasia Group is a private business that researches and advises clients about political risk. It describes the current oil situation as a crisis that could last "several weeks or months, until prices are low enough to change fundamental views in Moscow and Riyadh" and force a compromise. 14I'm Susan Shand. 15The Associated Press reported this story. Susan Shand adapted it for VOA Learning English. Caty Weaver was the editor. 16Write to us in the Comments Section or on our Facebook page. 17___________________________________________________________ 18Words in This Story 19barrel - n. a round usually wooden container with curved sides and flat ends 20client - n. a person who pays a professional person or organization for services 21fundamental - adj. of or relating to the basic structure