Because Russia and Saudi Arabia is in a real battle for oil prices

For three years, Russia and Saudi Arabia had a deal. Together they used to put their collective market power of a floor under oil prices by limiting their production. Then, about two weeks ago, it broke. The Saudis, slowed in response to the demand for oil, wanted to continue to maintain the average of the stable producer prices. The Russians are not inflexible agreement. They wanted to produce more. This is when the Saudis moved to Russia a lesson. They are committed to stifle the market with an additional 2.6 million barrels of crude per day and cut the price for customers in Europe, a critically important market for the Russian oil industry. In the coming days, crude oil prices fell 30%. The Saudis probably Message to Russians: “The price is now lower for both of us, but we grab more market share. You want to talk” Nyet came the word from Moscow: “There is no need to talk about our economy is much less dependent on oil exports that your and our rainy day funds are much deeper than we can absorb this pain for a long time, you can leave …? let us know if you change your mind, “the oil war after Saudi Arabia has rejected Russia sent a message like this in Washington.. “Let’s be honest, the Americans have ourselves first because impose sanctions. damage our oil industry they want to own to help your so which becomes the world’s number one oil producer in recent years … attack by our company with a low price offer great advantages for Russia “lower prices, hope that the Russians President Trump leave in a hard place. Shale production remains more expensive than conventional oil production, so the lower prices are some smaller US manufacturers in the failure units. It also makes Vladimir Putin offended to see the US stock market in free fall, or to imagine less globally money in alternative hydrocarbon years invested. As long as the last battle? Perhaps for months. The two commanders in the war Putin and Saudi Crown Prince Mohammed bin Salman pride, impulsive people, which are the pride toughness. Everyone thinks they have the best weapons, at least for now. Putin -remembers the tidal wave of the Saudi production in 1980 that helped drown -Soviet Union. Nor is there much chance of a significant intervention by a Trump -preoccupied. after all, he knows that Putin will play a dangerous game. Central Bank of Russia last year reported that a price of $25 a barrel oil, a number of far more likely now than when it was done-the Russian economy would push forecasting a recession. -Putin most important project right now is preparing the ground to make Russia’s leaders for the indefinite future. Then his popularity coincides with the Russian economy, he has increased spending to improve living standards. When he left dedicated to lower weathering oil prices too much money, the Russians would have had to pay much higher taxes. And although so far managed this fund rainy day with great care, knowing Putin that today we live in a world where a raging storm. In the end, Putin knows or should know are not-producers of shale Americans so easy to kill. It is small businesses that can go in and out of the market, as prices dictate. They will lower oil prices for a while ‘because the pandemic dramatically slow global oil demand. But eventually the economies will recover. The Russians and Saudis talk their way -toward the price of oil as well move higher. US shale production will come on line. We’re just left wondering as Putin and we want to go MBS.
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