The move in no way reflects a change of views on future oil demand scenarios, a source with direct knowledge of the matter told Reuters.
The change also was not a result of technical issues, but a directive from the government, the source added.
"If the government decides to go the other way, the company is ready," the source said.
Brent crude futures were little changed, up about 0.2% to $82.52 per barrel as of 0732 GMT.
Though the source with knowledge of the matter rejected the idea of any change in demand outlook, RBC said there would likely be much market speculation on the potential implications on global oil demand in the medium and long term as a result of the decision.
GROWTH AREAS
The reversal will drive momentum towards Aramco's growth areas, such as gas and new energies, the source with knowledge of the matter said. Aramco made its first M&A foray into liquefied natural gas last year, buying a minority stake in MidOcean Energy for $500 million.
Aramco is expected to provide an update on its capital expenditure plans when it announces its 2023 full-year results in March.
RBC Capital Markets said in a note on Tuesday it expected plans which have already received final investment decisions - such as the 600,000 bpd Zuluf, 300,000 bpd Marjan and 250,000 bpd Berri projects - to progress as planned.
But unsanctioned ones, like the 700,000 bpd Safaniya project, "are likely to be deferred," RBC said.
"We had assumed (a roughly) $12 billion budget for the Safaniya project, of which $3 billion was to be spent in 2024," the note said.
"All in all, we expect the capex budget could be lowered by (around) $5 billion per annum over the coming years relative to the prior guidance."
Aramco had said it expected capex of $45-55 billion in 2023, the highest in its history, and indicated it would raise this in the years to come.
"It may be to save money. But most likely it implies that it sees no need for this extra oil in the global market," said SEB analyst Bjarne Schieldrop.
RAISED IN 2020
Aramco was asked by the Energy Ministry in March 2020 to boost its maximum output capacity to 13 million bpd amid a stand-off with Russia over market share. On Tuesday, the ministry asked Aramco to return to its previous target of 12 million bpd.
After flooding the markets with cheap oil, Riyadh and Moscow in May 2020 resumed cooperation on production levels through the Organization of the Petroleum Exporting Countries and its allies led by Russia, collectively known as OPEC+. This group continues to coordinate output.
Spare capacity functions as the world's emergency oil stock yet only a handful of producers - mainly de facto OPEC leader Saudi Arabia and the United Arab Emirates - have any meaningful spare capacity.
That gives them room to adjust output depending on market needs.
"Aramco currently has spare capacity of 3 mbpd and that will be supported in the near future by a very important liquids displacement programme which will avail another 1 million bpd of oil and refined products for production," the source with knowledge of the matter said
Riyadh and Abu Dhabi have repeatedly called for more investment in oil and gas and argue fossil fuels will be part of the energy mix for decades to come.
Yet major consumers, including the United States and the European Union, have adopted policies aimed at transitioning away from fossil fuels to cleaner energy which has discouraged such investment.
