Saudi Arabia has announced 20% oil price discounts for April, dropping on Sunday the stock exchanges of the countries of the Persian Gulf and the value of the shares of the state-owned Aramco, the largest oil producer in the world.
According to the Financial Times, Arabia also plans to increase production to over 10 million barrels a day. The measure came after Russia rejected at the OPEC + meeting a reduction of 1.5 million barrels in daily world production. Saudi Arabia produces about 9.5 million barrels a day, although its capacity is 12.5 million. The USA produces 13 million barrels a day.
The price of oil has already fallen by 30% this year, with reduced demand from China and other Asian countries hit by the coronavirus outbreak. This fall will certainly widen, stressing markets around the world.