Bank of America: Saudi Arabia borrows OPEC+ increase to launch oil price war.

Francisco Blanch, managing director of commodity research at Bank of America, said that OPEC+ increasing oil production is part of Saudi Arabia's strategy. Saudi Arabia will launch a long and mild price war aimed at regaining market share. Saudi Arabia is the de facto leader of the oil-producing countries group, and the organization announced a third production increase last month, with a daily output increase of over 400,000 barrels, higher than previous plans. This production increase reverses years of supply restrictions aimed at maintaining high oil prices. Blanch said, "This is not a short and intense price war; instead, it will be a long and mild price war." He mentioned that this reflects Saudi Arabia's desire to take market share away from American shale oil. American shale oil is relatively well off but faces higher production costs. Blanch stated that Saudi Arabia is also trying to regain market share from other OPEC+ member countries. "They have been providing price support for over three years now," Blanch said, leading to an increase in competitors' production. "They've had enough." Blanch pointed out that the change in strategy has already had an effect. The latest US oil drilling data from Baker Hughes shows that the number of drilling rigs is at the lowest in about four years.