FT: Saudi Arabia intends to increase oil production and is ready for a period of low prices

Saudi Arabia is preparing to abandon its unofficial $100 per barrel oil target to regain market share, even if it means lower prices, the Financial Times reports.

The kingdom intends to support an OPEC+ production increase on December 1 as planned, even though it could trigger a prolonged period of low oil prices, according to sources familiar with Saudi Arabia’s position.

The market share of OPEC+ countries has fallen to a record low after production cuts from 2022 and increased supplies from the United States, Canada, Brazil and Guyana. According to the FT, Riyadh has decided it will no longer cede market share and believes the kingdom has enough financial capacity, including foreign exchange reserves and debt instruments, to weather a period of low prices.

Experts note that such a move by Saudi Arabia could lead to significant changes in the global oil market. This could affect the geopolitical situation, the economies of oil-producing countries and global efforts to transition to renewable energy sources.