Saudi Arabia said Tuesday it plans to boost oil exports to more than 10 million barrels per day as the OPEC kingpin escalates a price war with Russia.

The world's biggest crude exporter said it would free up an additional 250,000 bpd of oil for exports by using gas for domestic consumption. "Saudi Arabia will utilise the gas produced by the Fadhili gas plant to compensate for around 250,000 bpd of domestic oil consumption," a spokesman for the Saudi energy ministry said in a statement without detailing how one would replace the other.

This "will enable the kingdom to increase its crude exports during the coming few months to exceed 10 (million bpd)."

The kingdom has long sought to diversify its energy mix by tapping gas and renewables to free up more oil for export, the kingdom's chief revenue earner. The announcement comes after Saudi Arabia said last week it would increase production by at least 2.5 million bpd to 12.3 million bpd from April.

With global demand already low amid fears over the economic effects of the novel coronavirus pandemic, that decision sent crude prices diving. It came after the kingdom and other major producers, including Russia, failed to reach a deal earlier this month to slash output and shore up prices.

Saudi Aramco's chief executive Amin Nasser said on Monday that the company would use 300,000 bpd from its vast stocks to boost supply to 12.3 million bpd from next month. Saudi exports have hovered around seven million bpd over the past few years.

Fadhili gas plant, a subsidiary of Aramco, currently produces 1.5 billion cubic feet of gas per day, which Aramco says will rise to 2.5 billion cubic feet over the coming months. This will raise Saudi gas production to 12.2 billion cubic feet per day, freeing up more oil for export.

Global oil prices have gone into meltdown as the novel coronavirus hits the global economy, slashing demand even as producers boost their output after the talks collapsed.

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