Why Saudi Arabia’s Oil Price War Is Doomed To Fail
Authored by Andrew Critchlow via S&P Global Platts,
Oil price wars rarely achieve their objectives. Saudi Arabia and Russia racing to out-pump each other is unlikely to be any different.
Instead of declaring a victory in seizing market share back from their common rivals in the form of US shale, the main protagonists in Moscow and Riyadh are more likely to cause long-lasting damage to petrodollar economies already under pressure from demand destruction caused by climate change action and the onslaught on the global financial system from the coronavirus pandemic.
The effective collapse of the OPEC+ coalition when the group and its allies failed to agree on an additional 1.5 million b/d of cuts on March 6 has triggered a 30% collapse in prices, with no floor in sight. Brent crude is…