It very much looks like the Saudis don’t have that much room to pump extra oil, contrary to what President Joe Biden had hoped for in his recent visit.
Saudi Arabia’s Crown Prince Mohammed bin Salman on Saturday announced that the kingdom will be raising its production capacity to 13 million barrels per day by 2027 — meaning current capacity is already hitting the ceiling at an average of 10.7 million bpd in 2021.
“After that,” Prince Mohammed added, “the Kingdom will not have any more capability to increase production.”
This revelation is new to many as it was previously suggested that Saudi, which is also the country holding the world’s largest oil reserves, could go up to 15 million bpd. Javier Blas in Bloomberg op-ed cites a 2004 presentation where Aramco told CSIS in Washington that the company could sustain production levels at 10, 12 and 15 million bpd until up to 2054 if necessary.
According to a recent Reuters report, industry sources are questioning whether 12 million bpd can be reached. A source with access to Aramco insiders said that the company would not be able to pump more than 11 million bpd without drawing on stocks.
This newly unveiled reality underlines long-term global economy concerns, there’s still a long fossil-fuel-hungry road ahead.
Information for this briefing was found via Twitter, Bloomberg, Reuters and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.