Saudi Arabia requires US$80.90 per barrel oil if it is to meet its budgetary needs
Last October, OPEC+ opted to cut its crude output by two million barrels per day . The decision was taken despite desperate attempts by the Biden administration to stop them from doing so. With mid-term elections hardly a month away, the White House wanted the prices to stay low at next-door gas stations. It sent emissaries to Riyadh, the OPEC heavyweight, attempting to convince it to keep its crude taps open, at least until after the mid-term elections.
Riyadh seemed determined to move crude oil market prices further up. Amid a spree of spending announcements in Saudi Arabia, the International Monetary Fund says Riyadh needs a price of US $80.90 per barrel to meet its budgetary requirements. Ultimately, a compromise was reached. Saudi Arabia announced a voluntary reduction of its July output by one million bpd, with the possibility of extending the cut if needed. However, whether this reduction includes the 500,000 bpd cut announced in April remains unclear.