David Fickling, Columnist

Saudi Arabia's Output Cuts Will Protect Its Riches

By holding back on oil production, the kingdom can preserve revenue while sacrificing minimal market share.

January 10, 2021 at 11:00 PM UTC

David Fickling is a Bloomberg Opinion columnist covering climate change and energy. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.

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Saudi Arabia’s decision last week to deliver a surprise cut of 1 million barrels a day in its crude production shocked the oil market.

In abandoning a policy of collective responsibility and letting other members of the OPEC+ grouping increase output while reducing its own, the kingdom took the entire burden of balancing supply and demand on its shoulders. While choking off its own oil wells, Saudi Arabia is offering frenemies like Russia (and enemies like Iran) a chance to boost their market share on its own dime.