Cartel plans to substantially increase oil production

VIENNA — Saudi Arabia said Saturday that it was substantially increasing oil production to cool down rising prices and head off potential future shortages.

Khalid al-Falih, the Saudi energy minister, told journalists at the headquarters of the Organization of the Petroleum Exporting Countries here that Saudi Aramco, the national oil company, was in the process of ramping up production to increase exports from Saudi ports in July.

“Ships have been scheduled, and it will be hitting the markets, I assume, in August,” he said.

While declining to give a specific number, al-Falih said the kingdom would be increasing output by “hundreds of thousands, not tens of thousands, of barrels” — a substantial amount.

The Saudi comments were the most tangible indication yet that the kingdom, Russia and other big exporters are reversing their 17-month policy of holding oil off the market. Complaints about artificially high oil prices from President Donald Trump and other leaders of oil-consuming nations have played a role in the change of policy. There are also growing worries that declining supplies from Iran and Venezuela could make for an overly tight oil market in the future.

The major producers appear to have consumers’ interests in mind more than they have in the past. Al-Falih said that in addition to the tweets from Trump, Prime Minister Narendra Modi of India had spoken “clearly and loudly” about the negative impact of high oil prices on the Indian economy and that he had received phone calls with similar complaints from officials in China and South Korea, also big customers for Saudi crude.

Noting that an audit has found that Saudi Arabia has even more oil in the ground than previously estimated, he said that with decades of supplies to sell, Saudi Arabia needed to keep consumers buying oil and be mindful of their interests.