Riyadh vs Moscow in a full-fledged oil price war- the pointy ends?

      Published on Friday, 13 March , 2020      901 Views     
Riyadh vs Moscow in a full-fledged oil price war- the pointy ends?

  • World News

As a nerve-wracking price war over crude oil market shares triggered by the OPEC-kingpin Saudi following an unravelling of OPEC’s three-year-long pact with Russia and other allies,

often abbreviated as the OPEC+ on last Friday, had been casting a long-term shadow over oil price outlook, questions were raised on what extent Saudi and Russia were prepared to weather the withering fallouts of a protracted crude oil price war.

Nonetheless, as both Brent and US crude oil futures’ prices had been hovering near their multi-year low after nosediving as much as 30 per cent on Monday (March 9th) to mark up the crude oil futures’ steepest intra-day plunge since the Gulf war of 1991,

sources had confirmed that the Saudi Crown Prince, Mohammed bin Salman, who had been planning to dethrone his father over a casus belly of mental illness as early as by end-2020, had already sent a go-ahead signal to Saudi oil giant Aramco to forge every hand on to work to ramp up crude oil output and offered a steep discount to grab a larger portion of market share.

Meanwhile, Moscow said earlier that it could weather a crude oil price between $25 to $30 per barrel for up to ten years, but analysts said Saudi could not afford a crude oil price below $30 per barrel to avert potential attrition damages.

However, despite a Saudi war chest of nearly $600 billion which would likely to proffer the world’s largest crude oil exporter enough room to borrow further, analysts were betting in favour of Vladimir Putin’s Russia saying that an FX reserve of $570 billion alongside a free-floating Russian currency would more likely to place Kremlin in a better position, as referring to Russia’s ability to devalue its currency to adjust with the market condition amid a full-fledged oil price war, Russ Finance Minister Anton Siluanov said last week,

“Many people criticised us, they said this is a kind of treasure chest, that the finance ministry is sitting on gold. But now the situation could change and we will finance all the expenses we have undertaken and are obliged to make with this treasure chest. ”

Apart from that, amid conflicting narratives of a lose-lose crude oil price war which would likely to batter both Russ and Saudi economy heavily, Saudi’s GDP would be halved this war unless a truce could not be reached in a near-term outlook, while Kremlin appeared to be much better-equipped to weather a financial blunder, suggested analysts.

Category World News | 2020/03/13 latest update at 3:00 PM
Source : Internet | Photocredit : Google
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