OPEC

OPEC faces a "daunting" price balance challenge despite alliance with Russia

Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman.
Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman. Photo by Karim Sahib/AFP/Getty Images

If you want evidence that new Saudi Oil Minister Abdulaziz bin Salman faces a challenging job heading OPEC's top producer, the International Energy Agency's latest outlook this morning isn't a bad place to start.

Why it matters: The Saudis want a tighter market and higher prices to support domestic spending. More broadly, the report signals the ongoing difficulty OPEC faces influencing the market despite the 3-year-old alliance with Russia

The Saudis' crude oil price challenge

Data: U.S. Energy Information Administration; Chart: Axios Visuals

One big challenge facing Saudi Arabia is that crude prices are well below the roughly $80–$85 per barrel the country needs to balance its budget.

The big picture: Saudi Arabia shook up its oil hierarchy Saturday by ousting Khalid al-Falih as oil minister and replacing him with Prince Abdulaziz bin Salman. The kingdom is grappling with the U.S. production boom, sluggish global demand growth, and trade friction that's holding down oil prices.

Go deeper: Less than a year after Khashoggi murder, business booms for Saudi Arabia