OPEC+’s fiscal fandango

Breakeven prices are a blunt but important metric for managing oil markets and helping shape oil’s direction, but Saudi Arabia and other producers also see a bigger picture

The breakeven price for oil-producing nations serves as a significant metric that reflects the price at which their budgets are balanced, showing the financial stability and economic health of each respective country. The breakeven price often plays a crucial role in shaping production strategies, impacting global oil market dynamics and potentially having geopolitical consequences. It is worth noting that oil-producing countries have at times disregarded breakeven prices to prioritise increased production in a bid to capture a larger market share, as seen in 2020 when Saudi Arabia boosted output to 12.3m b/d. This approach has been used to pressure countries such as Russia and shale oil pro