Saudi Aramco reports higher oil demand from natural gas crisis

(Bloomberg) --Saudi Aramco said the natural-gas crisis was already boosting oil demand and reiterated plans to increase its production capacity.

Crude consumption’s risen by around 500,000 barrels a day, according to Amin Nasser, chief executive officer of the world’s biggest oil company. That’s roughly the same as OPEC member Venezuela’s total output.

A shortage of gas has sent prices soaring in Europe and Asia to the equivalent of around $180 per barrel of oil, forcing some businesses to switch to crude products for their power. Brent rose 2.8% to $81.48 a barrel by 3:05 p.m. in London, it highest level since 2018.

“There is higher demand,” Nasser said during an Energy Intelligence forum. “There is some shift we have seen from gas to liquids, especially in certain markets in Asia.”

Oil extended its gains on Monday after the OPEC+ cartel -- led by Saudi Arabia and Russia -- opting to proceed with gradual production increases, at least until December. Some traders were calling on the group to raise output faster to ease prices.

Other OPEC nations including Iraq and Nigeria have also said the gas shortages will a impact oil markets.

Nasser said Aramco would aim to complete an increase in daily oil-production capacity to 13 million barrels from 12 million by 2027. Though the company has not disclosed the cost of the project, it will likely require billions of dollars and signals Aramco’s confidence in demand remaining strong over the next decade at least.