Russian President Vladimir Putin shakes hands with then Saudi Deputy Crown Prince Mohammed bin Salman during a meeting at the Kremlin on May 30, 2017 [Reuters/Pavel Golovkin]
Daily Mail: How Saudi Arabia is trying to CRIPPLE Russian oil industry by flooding world market and dropping price to 30-year low in fight over coronavirus that could hit Trump's re-election hopes by triggering US recession
* The oil market plunged to a 30-year low on Sunday amid coronavirus fears and a price bidding war between Saudi Arabia and Russia
* Russia refused to sign on to a OPEC proposal to reduce global oil production in an effort to stabilize market as the coronavirus has slowed demand for oil
* Russia rebuffed proposal, refusing to boost US oil producers and lose profits
* On Saturday Saudi Arabia, the largest oil producer in world, slashed prices
* Russia told its oil producers to pump as much as they could
* Experts say the tension signals that Saudi Arabia and Russia are 'on the skids'
* Former Saudi Aramco VP said 'Saudi Arabia is protecting its market position'
* If the oil market plunge doesn't stop it could lead to a recession and threaten President Donald Trump's bid for re-election
* Americans will see prices at gas pump go down & a decline in US oil production
Saudi Arabia slashed its oil export prices over the weekend and declared a price war with Russia that sent global markets reeling and marked the sharpest decline in oil futures since 1991.
The price drop came after Russia refused to sign on with a proposal by the Organization of the Petroleum Exporting Countries (OPEC) to cut production globally as the coronavirus outbreak has slowed the demand for oil.
OPEC nations met with allies like Russia on Thursday and Friday in Vienna to reduce oil production by an additional 1.5million barrels per day to stabilize the market starting in April through the end of the year.
But Russia refused to join to agreement.
From Russia's perspective cutting production would boost US oil producers at the expense of international competitors and lead to a loss in profits.
Read more ....
WNU Editor: Besides Russia Saudi Arabia is also targeting America's shale producers. I personally do not understand the strategy that Saudi Arabia is currently implementing. Flooding the world with cheap oil is only going to make US shale producers more efficient in their production and distribution efforts. In regards to Saudi Arabia's impact on Russia's energy industry, Russia's energy industry is divergent. Russia is a major exporter of natural gas to Europe and China, and that alone will minimize the impact that lower oil prices will have. The Russian government has also built up a massive reserve of foreign currencies as a rainy day find. The fund provides the Kremlin with more than enough funds to offset these low oil prices and the loss of income from it for a very long time. The biggest loser that I see from this Saudi policy, aside from countries like Iran and Venezuela that are completely dependent on oil exports, is Saudi Arabia itself. They have arranged the biggest IPO in history with its state oil company Aramco. By these actions Saudi Arabia has shown itself to be a very unreliable partner, and it will negatively impact its IPO share price.
Update: That is about right .... Russia Says It Can Weather $25 Oil For Up To 10 Years (Zero Hedge).
5 comments:
I agree with WNU's comment about gas helping Russia weather this. This is not 1980 anymore.
Sux to be Iran and Venezuela.
Donald Trump claimed the plunging stock market was 'good' for consumers because it is based on cheaper gas Monday as Wall Street faced a fall so dramatic trading was briefly halted. 'Good for the consumer, gasoline prices coming down!' Trump tweeted Monday, one of a string of tweets accusing the 'fake news' of prompting the sell-off. He accused the media of 'inflaming' the virus outbreak and dismissed the collapse in oil prices as the result of Saudi Arabia and Russia 'arguing.' As the Dow Jones lost a year's gains, he was shuttling across Florida from Mar-a-Lago to a $100,000-a-head fundraiser - and tweeting that flu was worse than coronavirus. 'Saudi Arabia and Russia are arguing over the price and flow of oil,' Trump continued in another tweet Monday morning. 'That, and the Fake News, is the reason for the market drop!' Markets all over the world plummeted Monday over the growing threat of the virus spreading, but Trump has not addressed the economic impact as the coronavirus death toll bypassed 20 in the U.S.
Just War by other means. Let’s see how Russia fairs, I doubt they can handle this very long without cutting back services. I also think the Kingdom is choosing a fight that it needs to keep afloat. Saudi Arabia is a little further behind in getting off the Oil crutch, more work is needed.
Interesting times...
"Trump has not addressed the economic impact as the coronavirus death toll bypassed 20 in the U.S." - Clueless Raconteur
Get a grip.
Age, Sex, Existing Conditions of COVID-19 Cases and Deaths
The NYT is paywalled so no telling if their article has a break down by age, physical condition, or date. So of those elderly at the acute care facility in Washington state might have lived if the staff knew what they for a few more months or a year if they had known what they were dealing with.
Face it. You cannot test for everything in this day and age. And if you tried, you would go bankrupt.
Those 15 people in Washington were probably going to die by Labor Day anyway. There were at the acute care facility . The name means something. 3 to 6 people out of 120 die there a month. Do the math. Oh wait, you are dishonest and won't or you're stupid and can't.
The picture form Italy show middle age or older men who have bellies that rise about their chest height, when they are lying on a gurney. What does that tell you. I bet you can classify them at least as pre-diabetic,. They are obviously overweight or obese.
On another note this is the 3rd or 4th time Saudi Arabia has flooded the oil market since 1980. The 1st time it crippled the Soviet Union.
the last time was a few years back and they gave up. Now with slack demand their flooding of the market might have more impact. We'll see if Putin and the oligarchs can survive.
Iran and Venezuela won't if this goes on 6 months. North Korea will be alone except for Mommy Russian and Daddy Xi. And you will cry because all your favorite fascists are gone.
demand their > demand they're
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