Saudi Arabia will increase oil production only if there is a significant reduction in production in Russia. At the same time, the leadership of the Kingdom, according to FT sources, believes that there is “no shortage of oil on the market yet”
Saudi Arabia is ready to increase oil production if production in Russia drops significantly due to Western sanctions imposed on it. This was reported by the Financial Times, citing five sources familiar with the discussion.
At the same time, the sources note that the leadership of Saudi Arabia is aware that the market is overloaded and oil prices are high, but there are also believe that “there is no real shortage [in the market] yet.”
The newspaper's interlocutors also argue that despite the tension in relations between the US and Saudi Arabia, recent visits by high-ranking delegations from Washington “helped to improve relations.” After that, according to sources, the Kingdom agreed to “change the tone of relations as part of a rapprochement with the administration of [U.S. President Joe] Biden.”
Another source told the FT that the increase in oil production by Saudi Arabia, planned for September, will be moved to July and August, although OPEC+ will have to approve this change.
Since the beginning of the Russian military operation in Ukraine, Western countries, including the EU and the US, have already imposed several packages of sanctions against Moscow. Washington, in particular, in early March imposed an embargo on oil and gas supplies from Russia.
The European Union agreed on the sixth package of sanctions against Russia on May 30. The EU countries have agreed to introduce a partial oil embargo, which will affect the supply of Russian oil by sea. According to Bloomberg sources, at first— by 2023— The EU plans to abandon sea supplies of raw materials, and after the interests of a number of landlocked countries are satisfied,— expand the embargo on pipeline supplies.
Read on RBC Pro Pro Is it worth adopting the strange healthy lifestyle habits of Silicon Valley Articles Pro Tomorrow may no longer work: 3 steps to meaningful import substitution made an American a billionaire Articles Pro Amazon CEO: you need to rethink the business when everything is fine p>Russia is one of the world's largest producers and exporters of oil (along with Saudi Arabia). Its market share is about 10%.
Last year, the EU countries imported Russian crude oil and oil products worth €70.8 billion (for €48.3 billion and €22.6 billion, respectively). The total import of these products to the EU amounted to €251.6 billion, that is, Russia provided more than 28% of this volume, follows from the Eurostat database.
Russia's share in US imports of oil and oil products in 2020 increased to a record 7%, Bloomberg reported. Russia then bypassed Saudi Arabia in this indicator. In 2021, Russian producers almost tripled oil supplies to the United States. If in 2020 they exported there an average of 76 thousand barrels. per day, then for the first 11 months of 2021 this figure amounted to 209 thousand barrels. per day.
The Kremlin assumed that if the EU refuses to purchase Russian oil, then Russia will compensate for these volumes with sales in the east. Against the background of the embargo agreement, the price of the August futures for Brent oil exceeded $119 per barrel. Deputy Prime Minister of Russia Alexander Novak warned that if the embargo was adopted, it could soar even higher— up to $300 per barrel.
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