Saudi Arabia ditches plan to raise oil production

Saudi Arabia ditches plan to raise oil production

Saudi Arabia has dropped a plan to expand the kingdom’s daily oil production capacity, in a major policy reversal by the world’s largest oil exporter.State-run Saudi Aramco said on Tuesday that it had been asked by the energy ministry to abandon a plan to increase its maximum sustainable production capacity from 12mn barrels a day to 13mn b/d by 2027.The multibillion-dollar investment programme had set the company apart from much of the industry, where spending on oil production is generally falling because of concerns about climate targets and future demand. Saudi Aramco accounts for about 10 per cent of the 100mn barrels of oil the world consumes every day.The decision was taken by the ministry of energy and was not driven by any technical or operational issue at the company, which remains in a position to restart the investment programme if requested, according to a person familiar with the matter.

The move is a significant policy shift for the kingdom. Saudi Aramco chief executive Amin Nasser has spent the past two years advocating for more investment in oil production across the industry.

“The 100mn barrel system, because of lack of investment, is really fragile in terms of its ability to cope with