Saudi Arabia is leveraging the oil market chaos unleashed by Trump’s trade war to tighten its grip on rebellious OPEC+ members and pressure high-cost producers—but with far less room for error than in past price wars.
Saudi Arabia’s Power Play:
🛢️ Flooding the Market: OPEC+ shocked traders by accelerating production hikes (+411K bpd in May) and slashing Asian crude prices (Arab Light cut $2.30/barrel, steepest in 2 years).
🎯 Targets:
OPEC+ Cheaters: Iraq, UAE, Kazakhstan (overproduced by 1.2M bpd in February).
U.S. Shale: WTI below 60/barrel∗∗threatens drillers needing∗∗65+ to profit, per Dallas Fed.
Why Now?
Trump’s Tariffs cratered Brent 16% in a week, giving Riyadh cover to act.
“A warning shot to undisciplined producers,” says a Geneva-based trader. “Saudi won’t carry the burden alone.”
Risks for Riyadh:
Budget Bomb: IMF says Saudi needs 91/barrel∗∗ to balance its books —UAE survives at∗∗50.
OPEC+ Fracture: Prolonged low prices could break the alliance, a pillar of Saudi diplomacy.
Limited Timeframe: Unlike 2014’s 6-month shale siege, today’s market is more fragile.