... President Donald Trump, perhaps prematurely, announced via Twitter that Saudi Arabia and Russia appeared
ready to compromise
on production cutbacks. But some analysts warned that the Saudis seemed "
much more measured
" in their statements.
Russia has withdrawn
from the OPEC+ deal among oil-producing nations to cut production and regulate the market, and Saudi Arabia announced earlier this week it would increase its oil output. The breakup not only sent the market into a spin, but it also triggered a controversial reaction in Russia. Al-Monitor previously reported the
ambiguity in positions
between captains ...
... Russian-Saudi relations is the two countries’ growing competition on energy markets. In the past year, their rivalry has escalated in both Europe and China. In 2016, Saudi Arabia
began exporting crude
to Polish, Lithuanian and Czech refineries, while Russia, following the launch of the Eastern Siberia - Pacific Ocean (ESPO) pipeline,
became a key oil supplier
to China. Despite the ongoing calls for an output freeze, Saudi Arabia and its OPEC partners have been offering generous discounts to Asian and European customers, which
pits them squarely against Russia on these markets
.
Investments and joint projects
Oil-and-gas cooperation is also possible in the form of investments and technology ...
... the emergence of new exporters. Russia, for instance, became an important seller, followed by the United States some time later.
In this new constellation, a noticeable impact (on the oil price) can be achieved only if the two main producers – Russia and Saudi Arabia – coordinate their policies, integrating as many other OPEC member states and oil-producing countries (for instance from the post-Soviet space) as possible into the process. Notwithstanding the fact that the world's oil-exporting countries have disagreements amongst each other and face different production and economic problems,...
... – all this is aggravating the situation. The fall in prices is fraught with unexpected consequences.
Conspiracy, the laws of the market, and the oil weapon
When everything is so bad, conspiracy theories are the simplest explanation. What they boil down to is the idea that the USA and its OPEC ally Saudi Arabia have taken a political decision to bring about a collapse in prices in order to weaken Russia for acting, as they see it, too independently in the international arena, especially in Syria and Ukraine.
diepresse.com
Sami Faraj, President of the Kuwait Centre for
Strategic Studies: “There is no conspiracy, just
the laws of the market....
... could it as it holds relatively minor amount of global oil reserves – which are depleting quickly.
Russia may have emerged from the ashes of USSR, but it was far from a Phoenix as during 4-5 stages it once again had little sway – obviously Russia makes the most oil in the world, occasionally swapping places with Saudi Arabia for the top branch, but the Saudis wield OPEC which allows them to work more or less as a unit. In a way the situation has worsened as during the 1-3 stages oil markets were undeveloped, so being a price-taker still gave time to catch up, now the mature market has less scope for revolutionary ...
