Low Oil Prices for the Long Term: Reuters on Saudi Arabia's Signal and Consequences for Russia.

Saudi Arabia Ready to Increase Oil Production

Saudi officials report that the kingdom does not plan to cut oil supplies even at low prices and can withstand a prolonged period of this situation. This indicates an increase in production and the expansion of Saudi Arabia's market.

Earlier, Saudi Arabia emphasized adherence to OPEC+ quotas and compensation for overproduction. But now the kingdom is ready to change tactics and begin increasing production.

Falling oil prices are not good news for producers, but Saudi Arabia has a low cost of production. However, producers need higher prices to secure financing for their economies and government expenditures.

Saudi authorities have stated that they are prepared for low prices. They may also delay several large projects to ensure financial stability.

Russia is aware of Saudi Arabia's plans and prefers a slow increase in production. Both countries are major OPEC+ leaders and contribute most significantly to the reduction of output.

An increase in production might please the US president, who has called on OPEC to raise production to keep gasoline prices low in the US.

OPEC+ has decided to triple the planned production increase; however, the main task remains - the cancellation of cuts by the end of 2026.