Saudi Arabia is planning to pump a record amount of crude in July, embarking on one of its biggest-ever export surges to cool down oil prices, reports Bloomberg.
State oil company Saudi Aramco is aiming to boost production next month to about 10.8 million barrels a day. That would surpass the previous high of 10.72 million barrels a day in November 2016, illustrating its unprecedented response to the pressure U.S. President Donald Trump has put on OPEC to supply more oil.
Saudi Arabia, the world’s largest oil exporter, told OPEC it pumped 10.03 million barrels a day in May. The actual production level in July will depend on demand for exports and domestic consumption, so could end up ranging between 10.6 million and 11 million barrels a day. Domestic oil use surges during summer months as the kingdom burns crude to generate electricity for air conditioning.
Although OPEC gave no figures in its communique about the output increase, it is being estimated that the total hike from the cartel and its allies, including Russia, Oman, and Kazakhstan, would be “closer to 1 million than to 600,000 barrels a day.”
Saudi Arabia is under pressure from the White House to pump more oil ahead of the U.S. midterm elections in November. Trump has publicly complained about OPEC policy and rising oil prices on Twitter.
“Looks like OPEC is at it again,” Trump wrote in mid-April in a post on Twitter. “Oil prices are artificially Very High! No good and will not be accepted!” He criticized the cartel again in May and after last week’s meeting.
The Saudi state oil company is putting part of the extra production on storage, the Bloomberg report says. Aramco has tank farms within the kingdom, plus overseas in three strategic locations: Okinawa in Japan, Sidi Kerir in Egypt, and Rotterdam, in the Netherlands. Tanker tracking data for June shows a large uptick in Saudi oil shipments into Egypt.