- How do you interpret Saudi Arabia's decision to abandon its target of $100 per barrel and increase its production? Is it a response to a decline in demand or a longer-term strategy?

Despite the desire to reduce the effects of climate change, which requires a reduction in greenhouse gas emissions, thus reducing the consumption of fossil fuels (oil, coal, gas), these fossil fuels still cover more than 80% of our energy needs and oil more than 30%.

Although its share in the global energy mix is declining, oil consumption in volume continues to increase (as in the case of total energy consumption) each year. This oil consumption is about 100 million barrels per day (Mbj). Three countries dominate the world's oil production: the United States – about 16 Mbj, Saudi Arabia – 9 Mbj of production but with a much larger capacity – and Russia – about 12 Mbj.

The price of oil, which exceeded $100 per barrel at the beginning of the war in Ukraine in 2022, then fell and stabilized in 2023 and early 2024. But in the last few weeks this price has shrunk because world demand is declining due to a morose economic situation. In particular, Chinese demand (China is by far the largest oil-importing country) is declining.

In order to avoid overproduction in the face of stagnant demand, and to avoid too rapid a fall in prices, the producer countries in OPEC and OPEC plus have decided on production reductions for several months. But these reductions did not slow down the decline in prices. Saudi Arabia, which probably has the largest production capacity, has made the most significant efforts, reducing its extraction from 12 to 9 Mbj. But these efforts have proved insufficient. Faced with a decline in revenues and a loss of market share, Saudi Arabia is embarking on a price war by announcing an increase in production which will only be able, at least in the short term, to increase the downward trend in the market. This decision by Saudi Arabia aims to enable the Kingdom to increase its production and regain market share. This strategy of Saudi Arabia is a constant. With the world's largest oil reserves (a large proportion of Venezuela's reserves supposed to have higher reserves is in fact hard to exploit) Saudi Arabia, which is probably the lowest in the world's production costs, does not agree to lose market shares for example to American shale oil producers whose costs are far higher.

- What immediate and medium-term impacts could this increase in production have on the world oil market, particularly for importing countries such as France? Could the French economy benefit from falling oil prices?

Like most producing countries, Saudi Arabia needs a high price (80? To meet both the needs of its budget and the ambitious Vision 2030 development plan, which seeks in particular to reduce the country's dependence on hydrocarbons.

The current situation is not new. A similar situation was observed in 2014. The major event on the oil market over the last 20 years has undoubtedly been the considerable development of shale oil production in the United States, which allowed this country to see its production increase from 6 Mbj in 2006 to over 10 Mbj in 2014 (and 16 Mbj today). Due to overproduction of black gold, the price collapsed. But instead of reducing its production, Saudi Arabia has kept the taps open in the hope that a low price of oil would cause the collapse of American shale oil producers whose production costs are much higher than they are in the Arabian Peninsula. The kingdom and its neighbours in the Persian Arabian Gulf have been able to cope with considerable revenue losses for two years thanks to well-fed sovereign wealth funds when oil prices were high. But in 2016, OPEC, whose Saudi Arabia is by far the most important country, followed by the countries around Russia in OPEC plus, decided on production reductions that brought the price of oil down to a much higher level.

Saudi Arabia's decision to increase production is expected to lead in the coming weeks or months to a moderate oil price. Demand is stagnating and should remain so because of current political events (war in the Middle East, war in Ukraine ...). In front of this demand the production potential is important in many countries (United States, Brazil, Iraq ....)

- To what extent could an increase in Saudi oil production and a fall in barrel prices benefit French consumers, particularly in terms of fuel prices at the pump?

Both France and all importing countries benefit from this fall in prices. The cost of energy imports (especially oil and gas) which had exceeded EUR 100 billion in 2022 as a result of the war in Ukraine fell to a much lower level in 2023 and was expected to remain at this level in 2024.

The fall in oil prices will result in savings of several billion euros on France's energy bill

Of course, the fall in the price of oil translates into a fall in fuel and domestic fuel prices in the coming months. The price of gasoline, which was higher - on average - at 2 euros per litre in 2022, decreased by 15 per cent and could continue to decline. Gas oil prices, also around 2 euros per litre in 2022, decreased by 20%.

- More broadly - how should we benefit from this decision?

The profit is of course a reduction in France's external trade deficit and an immediate fall in fuel prices. Beyond consumers should benefit from lower prices for many products whose costs include transport costs, which are expected to decrease with lower diesel prices.

This fall in oil prices is also expected to lead to a general fall in energy prices, with oil remaining, at least for a few years, the reference energy.

It should not affect the evolution of our energy mix. The development of renewable energies – solar, wind – will not be affected because it is now a priority.