The Strategist

FT: Saudi Arabia is ready to increase oil production because of Russia's problems

06/03/2022 - 04:05

According to the Financial Times, Saudi Arabia has communicated to Western countries that it is prepared to increase oil production if Russia reduces output as a result of EU sanctions.

Eric Fischer
Eric Fischer
Five sources told the Financial Times that Saudi Arabia has conveyed to Western partners that it is willing to increase oil production if Russia decreases it significantly due to sanctions.

Riyadh has consistently rejected Washington's efforts to raise oil production, despite the fact that prices have risen beyond $120 per barrel. Fears of a supply crisis grew after the EU agreed to a sixth package of sanctions on Russia, which includes a ban on oil shipments by sea from Russia. "Saudi Arabia is well aware of the dangers and understands that losing control of oil pricing is not in their best interests," according to one of the sources.

Several visits to the kingdom by high-level White House delegations in recent weeks also contributed to the shift in Riyadh's stance, according to FT sources. They claim that Saudi Arabia has consented to a shift in policy in order to work more closely with US President Joe Biden's administration. If there is a supply shortage in the market, the country may eventually raise oil output.

According to one source, urgent production increases by Saudi Arabia and the United Arab Emirates have been considered and may be announced at the OPEC+ meeting on June 2. According to him, the bloc's countries' planned increase in oil production in September could be pushed back to July and August.