Saudi strategy runs deeper than cuts
Saudi Arabia’s production restraint may boost prices in the short term, but it may also assure the Kingdom greater market control in the longer term
Saudi energy minister Prince Abdulaziz bin Salman presented his early January announcement that the Kingdom would reduce its oil production by 1mn bl/d during February and March as a “gift” to the oil industry. And oil price bulls certainly reacted as if they had received a present as the market roared above $50/bl. But the decision, taken by Prince Abdulaziz’s brother Crown Prince Mohammed bin Salman (MbS), is also part of a longterm outlook designed to ensure oil price stability in a range that will allow Saudi Arabia to proceed with megaprojects under the wide-reaching Vision 2030. With oil revenues providing around SAR100bn ($27bn) less than was budgeted in 2020—c.53.5pc of the total—Riy

Also in this section
13 February 2025
New supply from Argentina, Brazil and Guyana is rich in middle distillates, but optimism in terms of volume growth remains tempered by regulatory and technical risks as well as price volatility
12 February 2025
The oilfield expansion provides a fresh influx of revenue but will strain its cooperation with OPEC+ and fails to mask deeper issues with the economy and investors
11 February 2025
Improving compliance among the group and wider group is offset by production increases in outliers Libya, Venezuela and Iran
10 February 2025
The country wants to kickstart its upstream but first needs to persuade investors to foot the bill