Saudi Arabia is frustrated with oil-producing countries like Russia, which have failed to cut production as agreed to raise oil prices. In response, Saudi Arabia is considering increasing its own oil exports, potentially lowering global prices. This move could severely impact Russia, which relies heavily on oil revenues to fund its war in Ukraine.
If oil prices drop by $20 per barrel, Russia could lose $20 billion in revenue, equivalent to 1% of its GDP. The Kremlin faces tough choices: reduce spending or deal with inflation and high interest rates. Despite Western sanctions and price caps, Russia has managed to profit through alternative markets and middlemen countries like China and India. Even if Saudi Arabia follows through with its plan, Russia is expected to continue funding its war for now, though its economy shows signs of strain.
This needs to be done.
Maybe not even $20 less per barrel is needed. “Crude Oil Urals Europe CFR Spot” is currently at about $69: https://www.investing.com/commodities/crude-oil-urals-spot-futures And I have found a Russian article stating “… The budget will be in trouble if the price of Russian Urals falls below $60 per barrel, economists say. …” From: “The Central Bank has warned that the National Welfare Fund’s money will run out in 2025. What will the Ministry of Finance do?” Центробанк предупредил, что деньги ФНБ кончатся в 2025 году. Что будет делать Минфин?
I wonder if the Saudis decisions could be linked to how hard Iran is hit? I mean there is not much love there
Saudi Arabia can do the opposite and cease oil production until Israel stops attacking their neighbors (like they did last time). It quadrupled the price of oil.
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Summary:
Saudi Arabia is frustrated with oil-producing countries like Russia, which have failed to cut production as agreed to raise oil prices. In response, Saudi Arabia is considering increasing its own oil exports, potentially lowering global prices. This move could severely impact Russia, which relies heavily on oil revenues to fund its war in Ukraine.
If oil prices drop by $20 per barrel, Russia could lose $20 billion in revenue, equivalent to 1% of its GDP. The Kremlin faces tough choices: reduce spending or deal with inflation and high interest rates. Despite Western sanctions and price caps, Russia has managed to profit through alternative markets and middlemen countries like China and India. Even if Saudi Arabia follows through with its plan, Russia is expected to continue funding its war for now, though its economy shows signs of strain.
This needs to be done.
Maybe not even $20 less per barrel is needed.
“Crude Oil Urals Europe CFR Spot” is currently at about $69:
https://www.investing.com/commodities/crude-oil-urals-spot-futures
And I have found a Russian article stating
“… The budget will be in trouble if the price of Russian Urals falls below $60 per barrel, economists say. …”
From:
“The Central Bank has warned that the National Welfare Fund’s money will run out in 2025. What will the Ministry of Finance do?”
Центробанк предупредил, что деньги ФНБ кончатся в 2025 году. Что будет делать Минфин?
I wonder if the Saudis decisions could be linked to how hard Iran is hit? I mean there is not much love there
Saudi Arabia can do the opposite and cease oil production until Israel stops attacking their neighbors (like they did last time). It quadrupled the price of oil.
https://en.wikipedia.org/wiki/1973_oil_crisis
I do hope the saudis do this
If this leads to lower gasoline prices in the US you can bet one presidential candidate will take direct credit for it.