Russian Oil Floods Markets, Strains Saudi Fund

The Saudi Crown Prince reveals a new city named "The Line". It will be a zero-carbon city. The place will be built at Neom, which is in the northwestern region of Saudi Arabia. All of this happened on January 10th, 2021. It was announced by the Saudi Royal Court.

Saudi Arabia is getting mad at Russia. Russia is putting lots of cheap oil on the market.

Russia is producing more oil. This is causing oil prices to drop. Saudi Arabia needs high oil prices for their big projects. Now they are having trouble paying for these projects.

The Wall Street Journal said that to fulfill Saudi Arabia's budget, oil prices need to go up. It needs to be more than $81 per barrel.

Russia is giving out low-priced oil, which is making oil prices go down. Saudi Arabia isn't happy with this because they need oil to cost more than a certain amount. This information comes from The Wall Street Journal.

The report shows Saudi Arabia tried to reduce oil output and raise prices. Moscow didn't stick to their commitment to do the same, and sent lots of cheap oil instead. Saudi Arabia is mad about this. People who know about this shared the information in the report.

The report said Saudi officials complained to senior Russian officials. They asked them to follow the agreed cuts.

OPEC+ planned to cut oil output and raise prices. However, recent information shows Russia might not be doing their part. Russia needs money for their economy and war.

Oil prices have been going down since March 2022. In March, there was a big issue with supply chains when Russia invaded Ukraine. This made oil prices go up to $120 per barrel. On Tuesday, WTI Crude oil fell 4% and is now just under $70 per barrel. Brent Crude oil fell 4% to $74.07 per barrel.

Saudi Arabia has a big budget for projects, called gigaprojects. It needs oil to help pay for them. The oil must cost at least $81 for them to have enough money. Some of the gigaprojects are a 110-mile city in the desert named "The Line" and a big resort in the Red Sea that is the size of Belgium.

Advisors told Saudi leaders they need expensive oil for five years to fund projects. They need lots of money because not many outside investors are interested.

In early June, a meeting of OPEC+ will take place. At this meeting, Saudi Arabia hopes to persuade Russia to implement oil production cuts.

. The blog was published on Business Insider's website.