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 now threatening to dip below $30/b and test levels last seen back in 2004. Some industry veterans even fear prices could plummet further to historic lows. Platts Oilgram News front page from September 1960 Abdullah bin Hamad al-Attiyah, Qatar’s former oil minister and OPEC president, fears markets are entering virtually uncharted territory. “I saw the first shock and the first collapse and this is worse,” said the former OPEC grandee in an interview from Doha with… continue reading
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Source: CTRM Center