Why Does Saudi Arabia Cut a Further 400,000 b/d?Aside from the OPEC+ production cut for the removal of 503,000 b/d from the total output, Saudi Arabia’s Energy Minister Abdul-Aziz bin Salman said his country would on its own cut another 400,000 b/d from its production, which would bring OPEC+ production cut to 2.1 mb/d. Saudi Arabia once favored a bigger market share, but now due to budget deficit and Saudi Aramco’s listing on the stock market, it is shifting towards pricing in a bid to prevent prices from falling any further. This issue is so important for Saudi Arabia that it has called on Iraq and Nigeria to comply with their production cuts. The Saudi government has insisted that in case of non-compliance by Iraq and Nigeria, it would not unilaterally lift its output and will wait for the next OPEC+ meeting next March. Saudi Arabia’s 400,000 b/d cut remains in full force and effect as long as Aramco has not been listed and the country’s budget deficit exists. In case Saudi Arabia reaches its objectives it is likely to start raising its production gradually. In either case, Saudi Arabia favors high prices and even the announcement of an extra 400,000 b/d production cut affected the market. On December 6, oil prices surged past $64 a barrel.