FT learns about Saudi Arabia's condition to increase oil production

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

Saudi Arabia is ready to increase oil production if Russian production drops significantly due to Western sanctions imposed on it. This is with reference to five sources familiar with the discussion, according to the newspaper Financial Times.

At the same time, the sources note that the leadership of Saudi Arabia is aware that the market is overloaded and oil prices are at a high level, but they also believe that "there is no real shortage [in the market] yet."

The interlocutors of the newspaper also argue that despite the tension in relations between the United States and Saudi Arabia, recent visits by high-ranking delegations from Washington "helped 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 Saudi oil production planned for September will be postponed to July and August, although OPEC + will have to approve this change.

Reuters learned about a possible meeting between Biden and the prince of Saudi Arabia Politics

Since the beginning of the Russian military operation in Ukraine, Western countries, including the EU and the US, have already introduced several packages of sanctions against Moscow. Washington, in particular, at the beginning of 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, first - by 2023 - the EU plans to abandon the sea supply of raw materials, and after the interests of a number of landlocked countries are satisfied, it will expand the embargo on pipeline supplies.

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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, EU countries imported Russian crude oil and petroleum products worth €70.8 billion (€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.

The share of Russia in US imports of oil and petroleum products in 2020 rose 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 an average of 76 thousand barrels per day there, then in the first 11 months of 2021 this figure amounted to 209 thousand barrels per day.

The Kremlin assumed that if the EU refused to purchase Russian oil, then Russia would 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. Russian Deputy Prime Minister Alexander Novak warned that if the embargo was adopted, it could soar even higher - up to $300 per barrel.

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