Saudi Arabia is set to increase its oil production starting December 1, 2024, moving away from its previous target of $100 per barrel, which could significantly impact Russia's economy amid its ongoing military operations in Ukraine.

Experts warn that the increase in Saudi oil supply and lower prices could strain Russia's finances, which heavily depend on oil revenues.

Recent market activity has seen West Texas Intermediate crude fall below $68 per barrel, while Brent crude hovers around $71, reflecting a bearish sentiment in the oil market.

OPEC+ has delayed the unwinding of some voluntary production cuts initially scheduled for October, now pushing this decision to December due to falling oil prices.

This decision has already begun to influence international oil prices, with reports indicating a drop of over 3% following Saudi Arabia's announcement.

OPEC has revised its global oil demand growth outlook downwards, particularly citing weaknesses in the Chinese market, which is the world's largest oil importer.

Despite consistently pumping around 9 million barrels per day, Saudi Arabia has lost market share to both non-OPEC+ producers and within OPEC itself.

The decline in oil prices is impacting European oil company stocks, with significant drops noted in the oil and gas sector of the Stoxx 600 index.

Recent estimates indicate a 5% decrease in Russia's crude oil export revenues, now approximately €664 million per day, further exacerbating its economic challenges.

Western allies of Ukraine have imposed economic sanctions, including a price cap of $60 per barrel on Russian oil exports, aiming to weaken Russia's economy.

The competition in oil markets, particularly with increased production from Saudi Arabia and potential increases from Libya, could diminish Russia's market share and financial resilience.

Saudi Arabia's decision to boost production in December signals a shift from previous strategies aimed at price stabilization, potentially leading to an extended period of lower oil prices.