Saudi Arabia threatens to crash global oil prices, - WSJ.

The Saudi Arabian Energy Minister warned that oil prices could drop to $50 a barrel. This will happen if OPEC member countries that violate agreements do not start adhering to the agreed production limits.

This was stated by OPEC representatives in an interview with The Wall Street Journal.

Other oil producers interpreted these words as a veiled threat from Saudi Arabia. In their opinion, the kingdom is ready to start a price war to maintain its market share if other countries continue to ignore OPEC+ agreements.

The situation is escalating ahead of an important online meeting scheduled for Wednesday. In it, key OPEC+ members, which include the Organization of the Petroleum Exporting Countries and their allies, are to discuss the possibility of easing oil production restrictions in December.

Geopolitical tension also affects the situation. After Iran launched rockets at Israel on Tuesday, oil prices surged, ending a week-long decline. The price of Brent crude oil, which is the international benchmark, initially jumped by 5%, but then stabilized at 2.4% above the previous level, just below $70 a barrel.

Oil prices. Oil production

Western countries fear that the escalation of the conflict could lead to the blockade of oil exports from the Persian Gulf through the Strait of Hormuz, which borders Iran. Such a development would inevitably lead to a sharp rise in oil prices.

However, despite prolonged geopolitical tensions, "black gold" prices have remained relatively stable in recent months, causing concern among Saudi officials. One reason for this situation is that other cartel members have not adhered to production limitation plans for most of this year.

During a recent conference call, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman openly warned other producers of a possible price drop to $50 a barrel if they do not comply with agreed production cuts.

Oil production, Russian oil, embargo, von der Leyen, war in Ukraine, EU sanctions

According to OPEC delegates who were on the call, he particularly emphasized the situation in Iraq, which in August exceeded quotas by 400,000 barrels per day, and in Kazakhstan, which plans to increase production thanks to the renewal of the Tengiz oil field with a production of 720,000 barrels per day.

The main message from Saudi Arabia was clear: increasing production volumes is pointless if there is no place for them on the market. One of the delegates even quoted words that were said during the conversation: "Some should keep silent and adhere to their commitments to OPEC+".