Saudi Arabia Tells Aramco to Halt Oil Production Capacity Increase — Update

By Pierre Bertrand

Saudi Arabian Oil Co., known as Aramco, said the Saudi government has ordered it not to ramp up its oil production capacity.

"Aramco announces that it has received a directive from the Ministry of Energy to maintain its Maximum Sustainable Capacity--MSC--at 12 million barrels per day," it said in a statement.

The oil-and-gas company said it received the instruction while it was working to increase its production capacity to 13 million barrels a day.

The company added Tuesday that it will update its capital-spending guidance when its 2023 results are disclosed in March.

The directive puts the breaks on the world's largest crude-oil exporter increasing its production capacity by 2027, tightening supply while turmoil in the Red Sea, winter storms in the U.S., and robust demand have pushed prices up in recent weeks.

The company said in its third-quarter results in November that it had produced an average of 12.8 million barrels of oil equivalent a day in the period.

Aramco received an instruction by the Kingdom's Ministry of Energy back in March 2020 to increase its maximum sustainable capacity to 13 million barrels a day, according to the company's website.

In 2022, Aramco's average hydrocarbon production was 13.6 million barrels a day, including 11.5 million barrels a day of total liquids.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

January 30, 2024 04:14 ET (09:14 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.