Aramco has announced its intention to maintain maximum sustainable capacity (MSC) at 12 million barrels per day (mmbbl/d).
The Saudi oil company chose not to further increase the MSC to 13 MMbbl/d following the directives of the Ministry of Energy.
The determination of the MSC aligns with the regulations set forth by the state, as outlined in the Hydrocarbons Law through Royal Decree M/37, dated December 20, 2017, the release added.
The company will update its capital spending guidance when its full-year 2023 results are announced in March.
This move comes after the world’s biggest oil producer said in November that it was progressing “very well” with a multibillion-dollar project to boost capacity to 13 mmbbl/d by 2027 as demand in China and India continues to grow. Saudi Arabia currently has capacity for 12 million and is producing about 9 million a day after curbed output as part of OPEC+ efforts to revive the global oil market and prevent a surplus.
“It’s the clearest sign yet that the kingdom is moderating its expectations of global oil demand growth in the coming years,” said Vandana Hari, the Singapore-based founder of Vanda Insights.
According to Amrita Sen, research director at consultancy Energy Aspects Ltd., the oil market does not need Saudi production capacity of 13 million barrels per day, because there are ample levels of OPEC production cuts available.
“We have to ask ourselves the question: over what timeline” will Aramco keep the lower capacity,” she said on Bloomberg Television.
Aramco is expecting an additional 1 million barrels a day of supply to be freed up for exports by 2030 as a result of the kingdom’s wider domestic plan to stop burning oil for power generation.
In a video message to the Baker Hughes 2024 annual meeting in Florence, Saudi Energy Minister Prince Abdulaziz bin Salman emphasized the need for joint efforts to ensure the stability of the oil market. He stated that it is not the responsibility of Saudi Arabia alone but also the duty of all players in the global oil market.
“Saudi Arabia and its partners have always been proactive in supporting the stability of the oil markets, but we believe that the health and safety of the international oil market is not the responsibility of Saudi Arabia alone but also the duty of all players in the global oil market,” said Minister Abdulaziz.
At the Florence conference, Abdulaziz also highlighted events such as the attack on the Kingdom’s energy infrastructure in September 2019 and the COVID-19 pandemic that required “exceptional measures.”
“We have always gone all the way, for the good of the global market and the world economy,” the minister added.
He also notes that Saudi Arabia has taken a significant step towards building a more sustainable future by launching an initiative that combines the energy transition and sustainability programs.
This initiative aims to achieve the global goal of fixing and reducing greenhouse gas emissions while increasing the use of clean energy. According to the minister, this action “is a just, orderly energy transition and fair that ensures the world achieves the goal of sustainable global change.”
