Saudi oil strategy threatens Russia's war economy

Politico writes about it. 

If Saudi Arabia increases oil output to boost its market share, it could drive prices down, squeezing Moscow’s revenue. Oil and gas have been Russia’s primary income for the past decade, funding half of its national budget.

Russian energy analyst Mikhail Krutikhin called this a "an enormous risk" for the Kremlin. "Saudi Arabia understands perfectly well that Russian companies do not comply with the demand to reduce production, so they are making their own plans," he said.

Economist Alexandra Prokopenko estimates that a $20 drop in oil prices would slash Russia's revenue by 1.8 trillion rubles ($20 billion). The Kremlin would have to choose between cutting spending or risking inflation and high interest rates, she explained.

Despite sanctions and production quotas, Russia’s fossil fuel profits surged 41% this year, according to its finance ministry. But if Saudi Arabia shifts to prioritizing volume over price, experts believe Moscow’s ability to fund its war economy will be further strained.

The Saudis are losing patience with other oil producers, said Ajay Parmar from ICIS. "This would be one way for the Saudis to fire a warning shot to the market that they will act."