Saudi Arabia to ditch the $100-per-barrel oil price target?

Key takeaways:

– OPEC, and particularly Saudi Arabia, does not set an officially stated oil price target. Doing so, while managing global oil output, would resemble a cartel behaviour, which the producers’ group deny.

– For Saudi Arabia, the reference to the $100 per barrel oil price reflects its fiscal breakeven level – the average price needed to balance the government budget. However, this does not imply that the Kingdom cannot function when oil prices fall below that threshold. Many countries continue to perform even with a budget deficit.

– If media reports suggesting that Saudi Arabia may be ditching that price target have credible sources, then the news could be interpreted as a threat by Saudi Arabia to other OPEC+ members, like Iraq and Kazakhstan, who have been overproducing.