Oil Markets Brace for Potential Supply War as Russia and Saudi Arabia Clash

Russia's Deputy Prime Minister Alexander Novak stated that the OPEC+ group is prepared to implement additional measures and deepen oil production cuts in the first quarter of 2024 to prevent market volatility and speculation. Novak emphasized that if the current actions are insufficient, OPEC+ countries are ready to take further steps to eliminate speculation and volatility. The recent OPEC+ supply decision, which included 2.2 million barrels per day of cuts for the first quarter of 2024, was deemed underwhelming by the market and failed to address disagreements over cuts and quotas. Analysts suggest that while the decision may erase the expected deficit early next year, it leaves uncertainty regarding future actions. Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman also indicated that the production cuts could extend beyond March 2024 if necessary.