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Saudi Arabia Intends To Maintain Its Current Oil Production Despite Falling Prices

Saudi Arabia Intends To Maintain Its Current Oil Production Despite Falling Prices

Saudi Arabia plans to maintain the current volume of oil production despite the recent drop in prices, the FT reported, citing sources.

"Five people familiar with Saudi Arabia's plans said that the fall in Brent oil prices by more than 10% over the past week... caused concern, but not panic in Riyadh," the report said. According to one of these sources, Saudi Arabia "does not see any problems" and does not consider it necessary to increase the volume of oil production cuts, since such dynamics in the oil market are associated with "sentiment."

According to sources, Saudi Arabia believes that the sell-off in the oil market has intensified due to the fall in stock markets and the strengthening of the dollar.

Experts, whose opinion is quoted by the newspaper, believe that additional oil cuts by Saudi Arabia will complicate relations between OPEC+ members since it will be difficult to convince countries to increase the volume of oil production cuts.

The new OPEC+ agreements started in May with a reduction in oil production by 9.7 million barrels per day for three months. Since August, the Alliance has continued to reduce production, but in a smaller volume — by 7.7 million barrels per day for the period until the end of the year, and then — by 5.8 million until the end of April 2022. The base of reference is October 2018, but for Russia and Saudi Arabia — the figure of 11 million barrels per day, from which, by analogy, there is a decrease of 23%, 18%, and 14%, respectively.

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