Saudi Arabia is preparing to revise its strategy in the oil market, abandoning the target benchmark for $ 100 per barrel. According to Financial Times , citing sources, Riyadh plans to increase oil production to restore lost market share, even if it leads to a fall in prices.
New OPEC+ plans
According to the publication, OPEC+ countries are preparing to confirm the plan of increasing oil production at the December 1 meeting. This means that Saudi Arabia and its allies can leave behind the previous tactics for reducing the production aimed at supporting high prices. The price of Brent oil, which in 2022 reached an average of $ 99 per barrel, has already started to fall against the backdrop of news about a possible change in Saudi Arabia's policy.
The goal is the market share
The decision of Saudi Arabia is conditioned by the desire not to yield to market parts to other countries. Despite the fact that the budget budget requires the price of oil about $ 100 per barrel, Riyadh believes that it will be able to withstand the period of lower prices due to reserves and sources of financing, such as foreign reserves and bonds.
Historical parallels
Saudi Arabia has already taken similar steps in the past. In 2020, she entered a price war with Russia after Moscow refused to support OPEC's decision to reduce production, as well as in 2014, when she blocked OPEC's calls to reduce production against the background of falling price through shale oil in the United States.
After the news of the news, the price of Brent oil fell by 2%, reaching $ 72 per barrel.
