Saudi Arabia to Abandon $100 Oil Price Target and Increase Production

Saudi Arabia is set to abandon its unofficial price target of $100 per barrel of oil and increase production to gain market share, even if it means lower prices, according to informed sources cited by the Financial Times.

OPEC+ countries are expected to confirm an increase in production as planned on December 1, despite oil prices having fallen, which could mean a longer period of low prices. As of September 26, the price of a barrel of Brent was $71.99, with quotes earlier this month falling below $70 for the first time since December 2021.

The Saudi government no longer wants to continue losing market share to other oil producers and believes it has sufficient funding sources, including reserves and international bonds, to survive a period of lower crude oil prices.

As part of a coordinated OPEC+ policy to support oil prices, Saudi Arabia has borne most of the voluntary production cuts, with a reduction of 2 million barrels per day over the past two years, more than a third of the total reduction in OPEC+.

Several cartel members, such as Iraq and Kazakhstan, have ignored agreements by exceeding their quotas, while Saudi Arabia is currently producing 8.9 million barrels per day, the minimum since 2011, excluding the period of the coronavirus pandemic and the attack on the Abqaiq refinery in 2019.

The Kingdom expects to gradually increase production by 1 million barrels per day by December 2025, which could be faster if other countries do not comply with agreements.