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#SaudiAramco navigates uncharted waters amid global oil rout

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Monday, 27 April, 2020, 17:20
#SaudiAramco navigates uncharted waters amid global oil rout

Saudi Aramco is navigating uncharted waters as it faces a possible lengthy recovery in global oil demand and crude prices. The unprecedented agreement by OPEC members and independent producers to take a historic amount of oil off the market beginning next month means that even as the Saudi state oil and gas giant is slashing its crude production, it is aggressively working to secure market share in at least one priority market through pricing, volume and deferred payment incentives. OPEC leader Saudi Arabia was a principal player in the historic mid-April agreement by a collective of major oil producers to reduce global oil supplies by at least 15 million barrels a day (bpd) beginning May 1 in response to the crushing impact of the coronavirus pandemic on global oil demand.In helping negotiate the pact, the kingdom ended a month-long price war with Russia involving elevated oil output that contributed to a steep decline in oil prices and added to the global oil glut. Concerns over whether the drastic actions taken by the group of oil producers will be enough to match the 20-30% plunge in worldwide demand, as global storage facilities fill up with unwanted crude barrels, saw the May contract price of US benchmark crude West Texas Intermediate slide sharply into negative territory for the first time on April 20.