Saudi’s launch oil price war

Saudi Arabia has launched an oil price war targeting its biggest rivals to swamp the crude market with supplies at deep discounts to win new customers next month, a move that would send crude prices tumbling and expected to ripple through the US Junk bond market, where shale producers have borrowed billions of dollars recently.

The Kingdom plans to pump more than 10m barrels a day next month while offering discounts of  20 per cent in key markets is also an attempt to punish Russia who refused to join production cuts with OPEC last week.

The Kingdom’s production could surpass 11m barrels a day, well above 9m b/d Riyadh had previously proposed lowering output to, which could see oil prices fall to $30 a barrel or lower.

Crown Prince Mohammed bin Salman, moved at the weekend to consolidate his position, arresting three members of the royal family that may have posed a threat to his accession of the throne.

Saudi Arabia had last week sought the support of OPEC and allies outside the cartel, such as Russia, for a substantial cut in production to stabilise the oil market, already reeling from the coronavirus outbreak which hit the global economy, which Russia torpedoed the plan.