Rubber Meets The Road: Let's See How Serious Saudi Is About Increasing Oil Prices

In June's OPEC+ meeting, the Saudis surprised everyone by announcing a voluntary cut of 1 million b/d. The voluntary cut, as designed, is to be evaluated monthly, and depending on market conditions (i.e. oil price), they can either extend, decrease the cut amount, or eliminate it in its entirety.

At what oil price will the Saudis start to reduce their voluntary cut? We don't know, but we can guess that it's probably around $85/bbl Brent.

With June coming to an end, it's time for the oil market to see just how serious the Saudis are about this voluntary cut. As readers will note, we have published our global oil supply & demand figures and came to the conclusion that for the rest of 2023, the oil market is firmly in the hands of the Saudis.

So if the Saudis want to push Brent to $90/bbl, they can even amidst all the macro concerns about demand. The question then becomes: how strong is the Saudi resolve?