Saudi Arabia Reports Ability to Endure Low Oil Prices

Crude oil prices have plunged to multi-week lows following reports that Saudi Arabia is signaling it can sustain a prolonged period of low oil prices and is unwilling to further prop up the market with supply cuts. This marks a significant policy shift for the kingdom, which has spent years supporting prices through coordinated output reductions as a leader of the OPEC+ alliance. Saudi Arabia's frustration with OPEC+ members like Kazakhstan and Iraq exceeding their production quotas has contributed to this change in strategy, with Riyadh now considering boosting production to expand its market share. The move has exacerbated fears of oversupply and prolonged low prices, pressuring oil-dependent economies that rely on higher prices for government revenues. The upcoming OPEC+ meeting on May 5 is expected to address these tensions, but markets have already reacted sharply. Analysts warn that extended lower oil prices could force producers to cut budgets and scale back major projects.