Saudi Arabia's game is simple: keep oil prices high as threats to its revenue loom, analysts say

Analysts say the rally in oil prices was the result of threats to the kingdom's revenue being made public.

A false sense of security in global markets could lead to a cut in oil output by the Organization of the Petroleum Exporting Countries. Several other members of the organization supported his comments. If Iranian oil returns to the market under a revived nuclear deal, the Organization of the Petroleum Exporting Countries will back a production cut.

After slumping for weeks amid fears of a recession and signs of progress on the Iran nuclear deal, the international oil benchmark rebounded to reach $100 per barrel.

Saudi Arabia's game is simple: keep oil prices high so the kingdom can get as much revenue as it can.

Stephen Ellis said that Saudi Arabia is looking to increase prices due to market uncertainty. Saudi Arabia wants to capture the benefit of high oil prices as long as possible because it appears more concerned about a recession.

If the US and Iran revive an agreement that freezes Tehran's nuclear program, prices could go up. After Tehran dropped a key provision, the chances of a deal increased.

According to experts, Iran could add 1 million barrels of oil a day to global markets, which would ease supply concerns as Europe looks to impose a partial ban on Russian crude.

As a result, the timing of Saudi Arabia's production-cut comment is important, as it came days after the price of oil hit $90 a barrel.

The kingdom's break-even price is $85, according to Kpler's lead crude analyst, who said that Riyadh wants to avoid a pricing environment that is not as convenient as it used to be.

Efforts to keep oil prices high would be at odds with US efforts to bring down crude.

As Washington and Tehran move closer to a deal that would lower oil prices, Saudi Arabia is moving the needle by threatening Iran with reentering the market.

He warned that Saudi Arabia could ruin the deal for those involved.