Investing.com -- Saudi Arabia's oil minister issued a warning that prices could plunge to $50 a barrel if certain OPEC+ members continue to exceed their agreed production limits, according to delegates cited by The Wall Street Journal.
The comments were perceived as a subtle warning that Saudi Arabia may consider starting a price war to maintain its market share if countries within OPEC+ do not adhere to their production curbs, the WSJ reported.
OPEC+—an alliance between the Organization of the Petroleum Exporting Countries and its allies—is set to meet in December to discuss potential changes to production limits.
Despite geopolitical tensions, oil prices have remained relatively low, climbing only briefly following the incident.
According to the WSJ, Saudi officials have been frustrated by the declining prices, in part due to some OPEC+ members ignoring their production commitments.
The WSJ said delegates, who attended a conference call last week, told them Saudi Arabia's Prince Abdulaziz bin Salman specifically called out Iraq and Kazakhstan for exceeding their quotas. Iraq overproduced by 400,000 barrels per day in August, while Kazakhstan's output is expected to rise with the return of its Tengiz field.
"The Saudi message was 'there is no point in adding more barrels if there isn't room for them in the market,'" a delegate told the WSJ.
Despite OPEC+ efforts to stabilize the market through production cuts, oil prices have declined, with major benchmarks down 16% last quarter. The kingdom has previously demonstrated its willingness to increase production if it believes others are undermining its efforts, as seen in past price wars, the WSJ noted.