Oil wars! Saudi Arabia threatens to crash oil prices to $50 a barrel

Saudi Arabia's energy minister has warned that prices oil could fall to $50 a barrel if the deal-breaking OPEC+ members do not stick to agreed production limits. This was announced by representatives of the organization, writes the American newspaper The Wall Street Journal.

Other producers interpreted these statements as a veiled threat from Saudi Arabia: the kingdom is ready to start a price war to maintain its market share if other countries do not adhere to the OPEC+ agreements.

Key members of the alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and their allies, plan to discuss the possibility of easing production curbs in December during an online meeting on Wednesday.

After Iran fired missiles at Israel on Tuesday, oil prices rose after weeks of steady declines. Brent crude, the international benchmark, rose 5% but ended up 2.4% higher at just under $70 a barrel.

The West fears that the wider conflict could cut off oil exports from the Persian Gulf, which passes through the Strait of Hormuz bordering Iran. This will inevitably lead to an increase in prices.

However, geopolitical tensions have continued for months without a significant impact on oil prices, and this has frustrated Saudi officials. This is partly because other cartel members did not stick to plans to curb production for most of this year.

In a conference call last week, Saudi Energy Minister Prince Abdulaziz bin Salman warned other producers that prices could fall to $50 a barrel if they do not implement agreed production cuts.

According to OPEC delegates who attended the call, he particularly singled out Iraq, which exceeded quotas by 400,000 barrels per day in August, and Kazakhstan, which plans to increase production by restoring the Tengiz oil field to 720,000 barrels per day.

The Saudi message was: "There is no point in increasing production if there is no place for it in the market," said one delegate. "Some people should keep quiet and respect their obligations to OPEC+“.