Politico: Saudi Arabia Can Undermine Putin's War Economy.

If Saudi Arabia increases its oil production, the Russian economy may face serious difficulties. It is claimed that Riyadh is ready to increase oil exports to capture market share, even at the expense of falling prices. This could be bad news for President Vladimir Putin, as oil and gas are the main sources of income for the Russian budget. Experts warn about significant risks to Moscow's budget due to its excessive reliance on oil revenues. Price reductions could lead to a significant decrease in Russia's income. Current exchange rates indicate that a $20 decrease in oil prices will reduce the country's income by 1.8 trillion rubles, which is about 1% of GDP. Saudi Arabia has great opportunities to change the tactics of market dominance by increasing production and exports, regardless of high oil prices.

Despite accusations against Russia, Kazakhstan, and Iraq exceeding their contractual oil supply volumes, Saudi Arabia has the greatest potential for changes in such a situation. During the first half of this year, Russia's income from fossil fuel extraction increased by 41%, despite sanctions imposed due to the conflict in Ukraine. President Vladimir Putin expressed his commitment to continue fuel extraction to support the Russian economy. Despite all these circumstances, the Kremlin, which requires funding, is unlikely to retreat from the war against Ukraine, although the national budget expects to sell oil at a price of approximately $70 per barrel.