Saudi Arabia's state-owned oil group Saudi Aramco, which plans to raise its supply to 12 mb/d in April 2020, i.e. when the existing oil production cut agreement expires, has received instructions from Saudia Arabia’s Ministry of Energy to boost its production capacity from 12 mb/d to 13 mb/d. Similarly, the United Arab Emirates, through its national company ADNOC, intends to raise its crude output to more than 4 mb/d in April 2020 and will accelerate its plans to expand its capacity to 5 mb/d, a target previously planned for 2030. In addition, Russian producers could increase their production by 0.3-0.5 mb/d.
Earlier in March 2020, the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers led by Russia failed to agree on a further cut in crude oil production in order to straighten prices. The current agreement on production cuts of 2.1 mb/d will expire on 31 March 2020 and will not be extended. These decisions immediately led to oil prices diving in international markets and losing more than 30% since the start of 2020. They are expected to result in global oil oversupply and in falling prices, harming US oil producers, whose crude oil has more than doubled over the past ten years thanks to unconventional resources, but who need prices over US$50/bbl to make shale oil and tight oil production profitable.