Saudi Arabia’s Oil Production Cuts Reflect Cost of Reshaping Economy
DUBAI—An oil production cut by Saudi Arabia and its allies demonstrated how Crown Prince Mohammed bin Salman is willing to set aside U.S. concerns to pursue a nationalist energy policy aimed at funding an expensive makeover of his kingdom.
This weekend’s move came as a surprise after Saudi Energy Minister Prince Abdulaziz bin Salman told industry analysts privately in February that the kingdom would tolerate oil prices slipping to around $65 or $70 a barrel, according to analysts and Saudi officials familiar with the matter. Brent crude, the international benchmark, was trending downward since late last year on global recession fears, nearing $70 a barrel last month. On Monday, oil prices posted their steepest one-day increase in more than a year, rising 6.3% to $84.93 a barrel.
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