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Tensions are rising between Saudi Arabia and Russia, as Russia continues to pump massive amounts of cheaper crude oil into the market and undermine Saudi efforts to increase prices. The Wall Street Journal reported on Saturday.
Saudi Arabia is reported to have expressed Its anger is with Russia for not honoring its earlier pledge to cut production in response to Western sanctions, ahead of a crucial OPEC+ meeting scheduled in Vienna on June 4.
Earlier this week, the Saudi energy minister issued a warning to oil speculators, hinting to the market that further production cuts were possible, but it was quickly contradicted by Russia’s deputy prime minister by expressing doubts about further cuts.
In early April, Saudi Arabia, Russia and other OPEC+ members said they would cut production, which was expected to support oil prices; Saudi Arabia began cutting production this month, but the latest available data shows that Russia continues to pump large amounts of oil into the market, adding to the global oversupply and affecting prices.
Crude oil futures are down nearly 10% from where they were in early April despite the Saudi-led production cuts, with Brent crude closing Friday at $76.95 a barrel.
Saudi Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, has launched an ambitious plan to use his resources from oil revenues to transform the kingdom’s economy, and is seen to be under pressure to maintain high oil prices as his budget requires an estimated $81/bbl to pay for mega development projects. At home.
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After OPEC+ unveiled the abrupt production cuts, Goldman Sachs raised its year-end Brent price forecast to $95 per barrel and its outlook for next year to $100 per barrel. This week, Goldman repeated its bullish call for crude oil and other commodities.
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