Saudi Arabia’s state-controlled Aramco on Tuesday announced it is shelving plans to raise its crude production capacity from 12 million barrels per day to 13 million barrels per day, amid broader market questions over the future of oil demand.

In a statement, the world’s largest crude exporter said it had been ordered by the Saudi ministry of energy to maintain its Maximum Sustainable Capacity (MSC) at current levels, several years and billions of dollars since it received a directive to boost production capacity to 13 million barrels per day by 2027.

Aramco, which went public in 2019, did not disclose the reason behind the ministry’s decision and said it will update its capital spending guidance when its full-year 2023 results are announced in March.

At 7:02 a.m. London time, Brent crude prices for March delivery were up 0.24% from previous close price at $82.60 per barrel. WTI contracts for March delivery were up 0.35% at $77.05 per barrel.

The Tuesday announcement comes amid mounting concerns over the outlook for oil demand worldwide, given a progressing global transition toward decarbonization that casts shadow over long-term investment projects in fossil fuels.

Global oil demand is projected to have risen by 2.3 million barrels per day in 2023 to 101.7 million barrels per day, according to the International Energy Agency’s annual report published in December.

However, the IEA noted that this “masks the impact of a further weakening of the macroeconomic climate.”

“Global 4Q23 demand growth has been revised down by almost 400 kb/d, with Europe making up more than half the decline,” the IEA said.

“The slowdown is set to continue in 2024, with global gains halving to 1.1 mb/d, as GDP growth stays below trend in major economies.”