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Photo: Alexey Nikolskey/Sputnik/AFP via Getty Images

Saudi Arabia plans to boost oil output and sharply cut prices, signaling the first response to Friday's collapse of OPEC's production-cutting pact with Russia and allied producers, according to multiple reports.

Why it matters: The unraveling of the OPEC+ agreement, at least for now, and declining oil demand due to the novel coronavirus' economic toll are upending global oil markets and geopolitics.

  • Oil prices plunged by roughly 10% on Friday and could see another sharp decline when Asian markets open Sunday night on the U.S. East Coast.

Driving the news: Saudi Arabia plans to boost production to well over 10 million barrels per day, compared to 9.7 mbd now, when OPEC-Russia output limits expire at month's end, per Bloomberg and Reuters.

  • Bloomberg also reports that the Saudis have privately signaled they could eventually raise output to 12 mbd.
  • "The shock-and-awe Saudi strategy could be an attempt to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to bring them back to the negotiating table, and then quickly reverse the production surge and start cutting output if a deal is achieved," Bloomberg reports.
  • Saudi state oil giant Aramco is also sharply cutting export prices starting next month, including "the biggest cut ever for Arab Light crude for Asia," according to S&P Global Platts.

The big picture: Friday's failure to extend and deepen the OPEC+ production limits marks at least the temporary end of OPEC's three-year joint effort with Russia to tighten markets and prop up prices.

  • The new fight for market share is likely to drive down prices even further, something that will also bring new problems for U.S. shale producers already facing challenging economics.

What's next: Tomorrow morning the International Energy Agency will announce its latest analysis of how much COVID-19 is estimated to curtail global oil demand this year.

Go deeper

Updated 4 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: Large coronavirus outbreaks leading to high death rates — Coronavirus cases are at an all-time high ahead of Election Day — U.S. tops 88,000 COVID-19 cases, setting new single-day record.
  2. Politics: States beg for Warp Speed billions.
  3. World: Taiwan reaches a record 200 days with no local coronavirus cases.
  4. 🎧Podcast: The vaccine race turns toward nationalism.

Technical glitch in Facebook's ad tools creates political firestorm

Facebook CEO Mark Zuckerberg. Photo: SOPA Images / Contributor

Facebook said late Thursday that a mix of "technical problems" and confusion among advertisers around its new political ad ban rules caused issues affecting ad campaigns of both parties.

Why it matters: A report out Thursday morning suggested the ad tools were causing campaign ads, even those that adhered to Facebook's new rules, to be paused. Very quickly, political campaigners began asserting the tech giant was enforcing policies in a way that was biased against their campaigns.

5 hours ago - Health

States beg for Warp Speed billions

A COVID-19 drive-thru testing center yesterday at Hard Rock Stadium in Miami Gardens. Photo: David Santiago/Miami Herald via AP

Operation Warp Speed has an Achilles' heel: States need billions to distribute vaccines — and many say they don't have the cash.

Why it matters: The first emergency use authorization could come as soon as next month, but vaccines require funding for workers, shipping and handling, and for reserving spaces for vaccination sites.