Saudi Arabia has indicated to western allies that it is prepared to raise oil production should Russia’s output fall substantially due to the energy sanctions against Moscow, the Financial Times (FT) reports, citing five people familiar with the discussions.

Key takeaways

“Saudi Arabia is aware of the risks and that it is not in their interests to lose control of oil prices.”

“Saudi Arabia’s view is that while the oil market is undoubtedly tight, which has buoyed the rise in prices, there are not yet genuine shortages.”

“There had been discussions about an immediate increase in production from Saudi Arabia and the United Arab Emirates, which could be announced at Thursday’s OPEC+ meeting.”

“But nothing has yet been finalised, and OPEC+ could still stick with its production plan that has been in place since the beginning of the COVID-19 crisis.”

Market reaction

WTI is consolidating the overnight losses around $111.00, as of writing, licking its wound after tumbling from near the $116.00 region on the above report.