The Saudi government directed its state oil company, Aramco, to cease oil expansion plans, setting a new target of a maximum sustained production capacity at 12 million barrels per day (bpd). The target is one million bpd lower than the one announced in 2020.
Saudi Arabia has historically maintained the world’s primary significant spare oil capacity, serving as a crucial buffer for global supplies during times of conflict or natural disasters. In recent years, other members of the Organization of the Petroleum Exporting Countries (OPEC), notably the United Arab Emirates, have also developed spare capacity.
As reported by Reuters, currently, Aramco possesses spare capacity of three million bpd, providing ample room for increasing output if market demand necessitates. The flexibility exists for Saudi Aramco to revise its capacity target upward at a later time if circumstances warrant.
