Saudi Arabia threatens to cut oil prices to $50 per barrel - WSJ

The agency notes that other producers interpreted this as a hidden threat and a signal that the kingdom is prepared to start a price war to maintain its market share.

Key members of the Organization of the Petroleum Exporting Countries and their allies, known collectively as OPEC+, are expected to discuss this during an online meeting today.

After Iran launched missiles at Israel, oil prices increased after weeks of steady decline. The price of Brent crude oil rose by 5%, eventually stabilizing 2.4% higher, just below $70 per barrel.

It is noted that the West is concerned that the Middle East war could disrupt oil exports in the Persian Gulf, leading to price increases.

However, geopolitical tensions have persisted for months without significantly impacting oil prices, frustrating Saudi officials. This is partly due to other cartel members not following production cut plans for most of this year.

During a phone conference last week, the Saudi Energy Minister warned other producers that prices could fall to $50 per barrel if they don’t comply with agreed production cuts.

He specifically highlighted Iraq, which exceeded quotas by 400,000 barrels per day in August, and Kazakhstan, which plans to increase production as the Tengiz oil field, producing 720,000 barrels per day, resumes operations.

According to one of the delegates present at the conference, the Saudi Energy Minister said there is no point in adding more barrels if there is no space for them on the market.

It was recently reported that Saudi Arabia plans to abandon its unofficial oil price target of $100 per barrel. The country intends to increase production to regain market share, even if it means lowering prices.