Russia is also hinting that it would prefer its partners of the OPEC+ group to leave oil production unchanged, as Moscow is okay with the current oil prices and production quotas.
Last week, Russian President Vladimir Putin said that energy prices were approaching “economically justified” levels.
For Saudi Arabia, however, oil below $80 doesn’t appear to be “economically justified.” Hence, Riyadh’s frustration with Moscow regarding the next OPEC+ move.
Saudi Arabia needs oil prices at $80.90 per barrel to balance its budget this year, the International Monetary Fund (IMF) said earlier this month.
Early on Monday, Brent was trading at around $77 per barrel.
Economic advisers have privately told the Saudi rulers in recent months that the Kingdom would need high oil prices over the next five years if its ambitious development projects, including the futuristic NEOM project of $500 billion were to come to light, according to the Journal’s sources.
Last week, before Russia dropped hints that it would prefer OPEC+ to leave production levels as-is, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, warned traders – again, against shorting oil futures.
Considering that OPEC+ wrong-footed short sellers when it announced the surprise production cut in April, last week’s comments from the most important oil official in the world’s top crude oil exporter shouldn’t be dismissed, analysts say.
