Shafaq News / An expert in the energy market stated today, Saturday, that Saudi Arabia (KSA) is expected to flood the market with additional oil supplies, aiming to regain control over prices. The largest crude oil exporter in the world is considering ramping up its production by more than two million bpd.
This prediction follows the recent conclusion of the "OPEC+" alliance's meeting, where members pledged voluntary production cuts without offering fixed commitments, leading to a decline in oil prices.
Paul Sankey from Sankey Research, speaking to CNBC, noted that Riyadh has the capacity to increase its production by an additional 2.5 million bpd.
Currently, KSA, a key player in OPEC and the OPEC+ alliance, is attempting to support oil by injecting reduced quantities. On Thursday, Riyadh extended its reduction by a million bpd.
However, Sankey highlighted how KSA shocked markets in 2014 when its actions contributed to slashing crude oil prices from around $110 per barrel to $50. Ultimately, the price drop forced high-cost producers out of the market as pumping became unprofitable.
Simultaneously, KSA continued pumping oil as it was better equipped to weather price decreases.
With competitors' supplies dwindling, Riyadh regained momentum in dictating prices.
During that time - much like today - according to Business Insider, the boom in US oil supplies was a headache for OPEC and KSA.
Sankey emphasized, "The oil organization is indeed facing a significant problem with US production levels."
It is noteworthy that US crude oil production witnessed a distinct surge this year, reaching a record monthly output in September of over 13.2 million bpd, according to Energy Information Administration data.