Market Overview

Saudi Arabia Threatens Another Oil Price War, As Nigeria, Angola Refuse OPEC+ Oil Cuts

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Saudi Arabia Threatens Another Oil Price War, As Nigeria, Angola Refuse OPEC+ Oil Cuts

Saudi Arabia could enter into another oil price war as Nigeria and Angola refuse to conform to the production cuts agreed by the Organization of Petroleum Exporting Countries and its allies, the Wall Street Journal reported Wednesday.

What Happened

The country's oil minister Prince Abdulaziz said at a June 18 OPEC virtual meeting that the kingdom will sell its oil at a discount to undercut Nigeria and Angola after they denied to make specific production cuts, according to the Journal.

"We know who your customers are," Abdulaziz is reported to have told the representatives of the two countries which count China and India as their biggest clients.

Why It Matters

Saudi Arabia last engaged with Russia in a price war in March as the two OPEC allies failed to find common footing on supply cuts, crashing oil prices to historic lows.

The OPEC+ countries, as OPEC and its allies are referred to, ultimately agreed to production cuts for three months in April, and further extended the cuts to July last month.

Price Action

Brent oil futures traded nearly 0.76% higher at $42.35 a barrel at press time on Thursday. West Texas Intermediate crude oil futures were similarly up 0.68% at $40.09.

 

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