Oil prices slide on report that Saudi is ready to pump more if Russian output sinks

Saudi Arabia is reportedly preparing to increase its oil production if Russia's output falls significantly as a result of the European Union's new sanctions in the wake of war in Ukraine, the Financial Times said in a report citing people familiar with the matter.

The price of oil was lower on Thursday morning, falling more than 2%. After a 0.5 percent gain on Wednesday, US West Texas Intermediate (WTI) crude fell to roughly $112 per barrel.

After increasing 0.6 per cent the day before, Brent crude was down to $113 a barrel.

Despite the fact that the price of oil has soared to its highest level in a decade, Saudi Arabia has resisted efforts from the White House to increase production.

The monarchy has stated that it needs to retain extra capacity on hand.

Fears of an oil scarcity grew as the EU imposed more sanctions on Moscow, including a prohibition on importing Russian oil via seaborne cargo.

Watch | Oil prices skid $3 a barrel as investors take profits ahead of OPEC+ meeting

Later this year, a pact with the United Kingdom that prohibits insurance of ships carrying oil could limit Moscow's ability to divert oil to other regions, according to reports.

According to the article, the decision to increase production could be disclosed during the OPEC+ meeting on Thursday.

Production increases that were supposed to happen in September would now happen in July and August.

While difficulties between the US and Saudi officials have existed in the past, recent trips by a high-level US team have helped to strengthen the relationship.

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