Calm down market prices: Saudi Arabia agrees to increase oil production

Saudi Arabia has warned its Western allies about its readiness to increase oil production if Russia reduces it due to sanctions.

“Saudi Arabia is aware of the risks and that losing control of oil prices is not in their interest,” said one person briefed on the kingdom’s views.

Diplomats and sources from the oil industry say that the oil market is overloaded and prices are rising because of this, but there is no real shortage of the resource yet. The picture may change as the world economy recovers from the coronavirus pandemic, the interlocutors are sure.

There were tense relations between the United States and Saudi Arabia, the kingdom’s authorities several times rejected calls from the White House and the G7 countries to urgently increase oil production.

Several visits by high-ranking US officials in recent weeks have helped rectify the situation. Brett McGurk, US National Security Council Middle East Coordinator, and Amos Hochstein, Energy Security Adviser to President Joe Biden, were in Riyadh. Diplomats familiar with the talks speak of Saudi agreement to change tone to try to calm prices and move closer to the Biden administration.

One diplomatic source said that the increase in oil production in Saudi Arabia and the UAE will be announced at the OPEC + meeting on June 2. The increase in production, planned for September, is likely to be postponed to July and August.


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