Saudi Arabia has declared Russia the “price war” in the oil market

In response to the failure of the transaction OPEC+ Saudi Arabia declared the Russian Federation “a price war” in the oil market.

As reported by Bloomberg, during the day, Brent crude fell by more than 35% and by the morning of March 9, amounted to 31.5 per barrel, and by 9:13 GMT – 33,31 USD/barrel.

Саудовская Аравия объявила России «ценовую войну» на нефтяном рынке

The current fall in oil prices has called the strongest since 1991, when the war began in the Persian Gulf. According to forecasts of the largest investment company in the United States and the world Goldman Sachs, Brent crude could fall to $ 20 per barrel.

On the backdrop of a sharp drop in oil prices the Russian ruble fell to 72.5 rubles/dollar and 82,7 rubles/Euro.

Саудовская Аравия объявила России «ценовую войну» на нефтяном рынке

March 1, the decline in oil prices discussed with oil companies Putin. He noted the importance of the mechanism of OPEC+, but stressed that the Russian budget and economy, the current price level of oil is acceptable, and the fall of the ruble led to an increase in revenues of Russia:

The reason for such a sharp fall in oil prices on March 9 was the collapse of the deal OPEC+ on additional reduction of oil production. It is noted that the failure of the transaction on 6 March resulted in the position of Moscow.

Earlier, the head of “Rosneft” Igor Sechin said that oil prices can’t fall below $ 90 per barrel.

“Below $ 90 per barrel oil price will not fall. This is due to several factors. But 90 is a good price. It allows you to work”, — said Sechin.

Later the head of “Rosneft” has written about the risks of the transaction OPEC+ President Vladimir Putin and even after the collapse of oil prices, caused by the spread of coronavirus, the company continued to oppose the extension of the deal. Note that other major companies have agreed to extend it until the end of II quarter of current conditions.

In response to Russia’s refusal to sign a deal OPEC+ Saudi Arabia at the same time increased oil production and reduced its official price. That is officially the beginning of the “price war” against Russia, which could lead to the collapse of the Russian economy. Thus, the Saudis are trying to return Russia to negotiations on the reduction of the production of “black gold”.