Saudi Arabia’s decision to boost oil output earlier this year, before Israel’s sudden attack on Iran, has drawn attention to the complex interplay between geopolitics and market strategy in the Middle East. The Financial Times reports that while the Saudi-led Opec+ cartel accelerated the return of idled production amid falling crude prices, Riyadh remained cautious about provoking disruptions in the region’s fragile oil supply.
Despite public pressure from the White House and former President Donald Trump—who urged Saudi Arabia and Opec to raise production to address challenges including Iran, Russia, and inflation—Saudi officials were mindful of past lessons. In 2018, Saudi Arabia increased output following US calls but was undercut when Washington granted waivers to Iranian oil importers, causing prices to plunge below $50 a barrel.
“Saudi Arabia is determined not to repeat the mistakes of 2018,” sources familiar with the matter told the Financial Times. Prince Abdulaziz bin Salman, Saudi Energy Minister, privately stressed a cautious approach, balancing market share goals with geopolitical risks.
Analysts note that Saudi Arabia’s push to restore supply was motivated largely by the diminishing impact of prolonged production cuts and the desire to regain lost market share. Several Opec+ members, notably Kazakhstan, had been exceeding their quotas, frustrating Riyadh, which had shouldered the bulk of output reductions—cutting nearly 2 million barrels per day.
At the same time, the US pursued a “maximum pressure” campaign on Iran, including threats to tighten sanctions on Tehran’s oil exports. However, Riyadh was reluctant to ramp up production significantly ahead of any concrete disruptions.
Helima Croft, head of global commodity strategy at RBC Capital Markets, told the Financial Times that Saudi Arabia’s recent production moves may also have been influenced by its efforts to secure access to advanced US technology. Following Trump’s visit to Riyadh, the kingdom gained important concessions for its artificial intelligence, civilian nuclear, and defense sectors, cementing a favored status in Washington.
The surge in oil prices following Israel’s attack on Iran on Friday has complicated the US administration’s options, raising fears that higher energy costs could exacerbate inflation. Kevin Book of ClearView Energy Partners commented, “The Opec+ supply additions created space for some of the supply disruption that could come from the Israeli attack on Iran. But they don’t create space for both that and new Russia sanctions.”
If elevated prices persist or supply interruptions worsen, the US could tap into its Strategic Petroleum Reserve, which currently holds around 400 million barrels—down from its 727 million barrel capacity due to previous drawdowns under President Biden.
While the US may press Saudi Arabia for even greater production increases, Riyadh must weigh its role carefully. Iran remains a key Opec member, and Saudi Arabia is cautious not to undermine regional détente efforts with Gulf neighbors.
Bob McNally, former advisor to President George W. Bush, summed it up for the Financial Times: “What do presidents do when oil prices go up? They pick up the phone and call Saudi Arabia. But Riyadh and other Opec+ members will likely respond cautiously given the delicate geopolitics.”
