At the end of last month, Saudi Arabia abolished flogging as a punishment , welcome news to adulterers in Riyadh and Jeddah's cyber-criminals. However, the kingdom has other, new and unusual punishments in its arsenal, and the ability to inflict pain on millions in the oil and gas industry without physically lashing a whip. In early March, state oil company Saudi Aramco announced it would aggressively increase its oil production by two million barrels a day bpd , after Saudi Arabia failed to reach an agreement on production cuts with Russia.
This triggered a collapse in the oil price and saw American crude being traded at negative prices. Rigs and boats were cancelled around the world see here and projects were delayed, suspended or postponed, plunging every sector of the offshore industry into crisis.
The crisis has even impacted companies that have attempted to diversify away from oil and gas services. Maersk Drilling and Maersk Supply Services have both implemented widespread redundancies this month, with around 30 per cent of shore staff reportedly being laid off, mainly at the companies' headquarters in Denmark, despite their efforts to focus on decommissioning Maersk Decom and subsea mining here.
Even the company's new investments in wind farm support vessels have been hard hit. The Norwegian shipyard Havyard, where Esvagt has contracted three newbuild dynamically positioned service vessels, has required emergency funding from Esvagt, and has delayed delivery of the new windfarm vessels.
Now, Saudi Arabia has made a sharp U-turn. The kingdom first brokered an agreement between OPEC and Russia in April to make collective production cuts of just under ten million bpd, around 10 per cent of global pre-Covid demand. Then, this week, Saudi Arabia announced further cuts to support prices.
