Saudi Arabia Announces Launch of “International Coalition to Implement the Two-State Solution”

On Thursday, the Financial Times newspaper reported that informed sources said that Saudi Arabia is preparing to abandon its unofficial crude oil price target of $100 per barrel as part of its willingness to increase production. to regain its market share, even at the cost of lower prices.

The OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and other allies, including Russia, reduced oil production to support prices.

However, prices have fallen about 6 percent so far this year amid increased supply from other producers, particularly the United States, as well as weak demand growth in China.

The OPEC+ alliance earlier this month agreed to postpone a planned increase in oil production in October for two months after crude prices hit their lowest levels in nine months, and said that they could temporarily stop or reverse the increase if necessary.

The Financial Times reported that the coalition is committed to increasing production as scheduled on December 1, even if this will result in lower oil prices for a longer period of time.

Brent crude fell about 2.6 percent to $71.57 by 0745 GMT after the newspaper report.

Saudi Arabia’s Government Communications Center has yet to respond to a request for comment.

The newspaper said that Saudi Arabia believed it was unwilling to continue giving up its market share to other oil producers and believed it had financing options that included foreign currency reserves. and enough debt to withstand the decline in crude prices for a while.

The Kingdom, the world’s largest oil exporter, will bear the brunt of the OPEC+ production cuts by reducing production by around two million barrels per day from the end of 2022.

OPEC + members are currently reducing production by 5.86 million barrels per day, equivalent to approximately 5.7 percent of global oil demand.

But Saudi Arabia has previously increased production to maintain its market share.

Saudi Arabia and Russia fought a price war in 2020 and flooded global markets with oil after Moscow refused to back OPEC’s decision to further cut production to deal with the impact of the Covid pandemic -19.

In 2014, Riyadh blocked calls from some OPEC members to reduce production to stop the decline in oil prices, which paved the way for a battle for market share between OPEC and producing countries or -OPEC amid rising American shale oil production.

OPEC and Saudi Arabia have repeatedly said that they do not aim for a specific price for oil and make decisions based on market fundamentals and to achieve a balance between supply and demand.