Originally appeared at ZeroHedge
“We do not think that anyone should intervene in these relations,” the Russian presidency’s office stated Friday of its “good relationship” and “partnership” with the Saudis, hitting back at Trump’s comments on the emerging oil-price war. Yesterday President Trump described the Saudi-Russia oil price war as “very bad” for Saudi Arabia but ultimately “devastating” to Russia, but with the consolation of lower prices at the pump for American consumers.
Trump assured the public that “we have a lot of power over the situation,” adding that that Washington will attempt mediate the dispute “at the appropriate time.” This after US oil prices collapsed by a staggering 24% Wednesday to just $20, before clawing back Thursday afternoon and into Friday morning to $25 on Trump’s comments and especially reports that the US will buy up to 30 million barrels of crude for its emergency stockpile by the end of June.
But as expected the Kremlin has remained unblinking since launching its ‘war on US shale’ when it early this month ditched Riyadh and OPEC+ plans to significantly cut production, sending crude prices crashing and leaving dozens of American producers teetering on bankruptcy. Russian presidential spokesman Dmitry Peskov downplayed the emerging crisis Friday: “There are no price wars between Russia and Saudi Arabia. There is a very unfavorable pricing environment for many countries,” he said according to TASS.
So it does indeed appear Moscow and Riyadh are in for a long game of chicken, and certainly the Russians have signaled they’ve long built up the reserves necessary to weather the storm of however far the Saudis want to take things. On this note, Bloomberg warns “Russian President Vladimir Putin will refuse to submit to what the Kremlin sees as oil blackmail from Saudi Arabia, signaling the price war that’s roiling global energy markets will continue.”
And further, the Kremlin is bracing itself to endure through the carnage, writes Bloomberg further: “The unprecedented clash between the two giant exporters — and former OPEC+ allies — threatens to push the price of a barrel below $20, but Moscow won’t be the first to blink and seek a truce, said people familiar with the government’s position. Russia is confident “it can hold out longer than Riyadh,” the report observed.
As for the White House signaling a potential near-future intervention, which reportedly involves talk of more sanctions on Russia with diplomatic pressures on Saudi Arabia to curb output as opposed to the expected flood of cheap crude to hit the market in April, the Russian presidential spokesman dismissed the scapegoating as but more “Russo-phobia” in Friday comments.
Peskov said further, “We understand that indeed many companies are now suffering due to low oil prices, we know that the huge US oil sector is now in distress because of these prices.” He singled out those who produce shale oil: “There is a serious crisis, we also understand this,” Peskov said, per state-run TASS.
“Certainly, this price situation is fairly unpleasant. It is possible to agree in this respect,” Peskov added, but then crucially referenced Russia’s safety margin in terms of reserves, tipping its cards showing just how far it’s willing to hold out.
“When saying that this is a catastrophe for Russia, there is probably no way of agreeing with this in midterm, since as our president and our government reiterated that we have a solid safety margin for several years, which will support fulfilling all social commitments, development plans, and so on,” Peskov added.”There were times when the price was even lower.”
But as Bloomberg notes, “The losses are already visible for Russia, weakening its currency and potentially putting the nation on course for a recession.” The Russians are ready for it to sting a bit, but are resolved to make their geopolitical rivals suffer first. “The state budget, which is based on oil prices of just above $40 per barrel, may be in deficit this year, forcing the government to tap its sovereign-wealth fund just two months after Putin promised higher social spending,” Bloomberg added.
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“Yesterday President Trump the Saudi-Russia oil price war as “very bad” for Saudi Arabia but
ultimately “devastating” to Russia, but with the consolation of lower
prices at the pump for American consumers.”
talk about BS. i’ll bet he even said this with a straight face. lol
Yes, and again we see the US ‘projection’ of the reality again being falsely attributed to Russia.
It is NOT Russia that has a debt fuelled Fracking boondoggle.
It IS the US that Trumpy proclaimed to be the No1 in oil production, ignoring the fact that Fracking is financially compromised and only exists on growing and unpayable debt mountain’s.
Like most things to come out of the US, fracking is expensive, unnecessary and overpriced.
There are suitable alternatives to US goods and very good reasons NOT to buy US goods.
LOL…sour grapes because you Russians will no longer have the money to buy US goods.
No such thing as “US goods”.
LOL…more sour grapes, Comrade.
The only goods the US produces is weapons….Over priced weapons, and to a lesser degree cars.
I doubt the Russian´s have any interest in those.
Most other so called “US goods” are made in China.
Who cares who makes OUR goods? If you were smart you would also make OUR goods.
US goods? Your country produces NOTHING!
LOL…without our NOTHING, Russia would collapse even faster.
Dream away. For now Russia is very well, and mooricans die like cockroaches because of the virus and the poverty… They cannot affor even a basic healthcare LOL. In Russia is free, btw…
LOL…that’s why Russians die several years younger than Americans? That’s why almost 90% of Russians would qualify for Food Stamps here? That is why almost half of Russian Millennials want to move to another country? You are quite funny, Igor.
They are the world’s leading producer of lies and a close second after Israel for racist hatred.
lmao, America is the most racist country in the world! When it comes to lying most countries don’t even take your country seriously anymore!
It’s hard to understand your point. Companies only turn to fracking when oil becomes expensive and, therefore, becomes a profitable endeavor. When oil becomes cheap, frackers close up shop. You seem to have it Bass Ackwards. And US goods are quality goods. What does Russia produce? LOL Nothing.
Russia is the highest wheat exporter in the world, along with many other industries! Rocket engines so the Americans can get to space lol
Wheat exporter? LOL I am glad that Russia has cracked the problem of agriculture. LOL Rocket engines? Are you joking? Russia is a taxi or Uber to Low Earth Orbit, which is fitting really. After leading Low Earth Orbit for decades, the NASA and the Americans abandoned it as mundane and set its sites on the rest of the solar system and beyond. Russia now competes with America’s private sector for low earth capabilities. It is amusing that Russians find growing wheat, building a bridge, and achieving low earth orbit as something to feel pride in.
Damn, I like you!
You’ve just been dustbinned with the rest of the Zio shills
Huh? Waddaya mean?
No nation can get past low earth orbit. NASA=never a straight answer=lies. but … but … We went to the moon. ha ha ha
Sure. That’s why NASA has vehicles throughout the solar system and a couple that have gone beyond.
Dude, you are stupid as hell. Vehicles can pass the orbit, but people will die from irradiation. Van Hallen belt, you know what means? It is surely not a vegetable LOL!
I’m the stupid one? LOL Conspiracy theorists fall into 2 categories. 1) The Stupid, and, 2) The Intellectually Dishonest. Which one are you, dummy?
I can actually believe that you guys blew up your own space shuttle because it was “mundane”.
You guys? You think I work for NASA?
No, more likely a contractor to US cybercom, but I was using “you guys” as a collective term for degenerate Yanks. Don’t give me that Japanese bullshit either, I grew up surrounded by Japanese people and they all had a sense of honour you couldn’t hope to mimic.
You were surrounded by Japanese people? Was it at Iwo Jima, Boomer? Otherwise, you wouldn’t know a Katsu from a donburi.
Lol, that meme went stale months ago. Thanks for clarifying that you’re just a stupid child not a paid shill though, I shan’t waste any more time on you.
It’s one thing to be stupid and it’s another thing entirely to be mean. I’m not stupid. And I’m not a child!
LOL…wheat is a minority if the grain people eat and use. The US is by far the biggest producer and exporter of all grains and all agricultural products. And without US advanced technology and machines, Russia wouldn’t be able to make those rocket engines. However, you may be correct about the Porn Industry, especially the Pedo part of it.
20 Shekels for you
You want to pay me for knowing what every 9th grade student knows? LOL Ok.
China knows that too, and if they feel they were on the receiving end of a US-engineered virus they will make America suffer for it
Which face though?
Trumps exposing the deep state narrative,Russias exposing their overhyped failed economy (period)
“Russias exposing their overhyped failed economy”
I seem to see the US gov as the ones finging out paper debt to everyone with a pulse, small business, large business, Banks and every financial institution to be found. Can you show evidence of Russia doing the same? I suspect not.
Think Jimi meant Russia was exposing the US over hyped economy.
Russia would never bail out businesses publicly because the public knows that all of these businesses are connected to Putin and his circle. Putin bails out these businesses secretly. It doesn’t matter to him. It’s all his money anyway.
You talk a lot of BS
That may be your opinion Robert, but my opinions are based on scholarship and fact.
your opinions r based upon fictions—fake scholarship from fake US academics…described by Hofstadter as “technicians that serve power that have a thin understanding of everything…Japan is an amerikan colony—obvious
Fake scholarship? The Russian Academy of Sciences had to retract 800 scientific papers due to plagiarism. Russian scientists were simply copying the work of other international scientists. And you are casting stones at USA and Japan? LOL And, now WHO is concerned that Russia is faking its incidence rate data. That would be a betrayal to the Russian people. Russian people cause much misery in the world, but they still not deserve to be deceived by their own government.
Any vaguely convincing lies are based on facts, a fact I’m sure whoever pays you to post disinformation and propaganda taught you at your induction.
LOL…BS? Who speaks of BS? Damn, you are entertaining.
your stupidity is predicted–u r farcical
Predicted by what? It’s not as if a regular person can succeed in Russia. We all know that.
Trump is the deep state! He doesn’t work for America but Netanyahu
And just about then, the Pandemic will help sweep Putz Putin the Poisoner’s RF into the dustbin of history to keep the dead Soviet and Czarist Russian Empires company.
We should all hope that Coronavirus will not devastate Russia as much as the scientists say it will.
Why? The SOB’s deserve it. And if you are actually Chinese, you should also feel that way. When the RF collapses, China will finally get what it has wanted for centuries, most all of Siberia.
Why? Because even though the Russians have caused so much pain and misery for Ukraine and its other neighbors, the Russian people are still human beings. They deserve the sympathy and compassion that they so often deny others. I am not Chinese! Japanese. And, you are right, when the Federation collapses, Tatarstan will become independent. It’s possible that areas bordering China and Korea will join China.
LOL…your tag doesn’t look Japanese. I actually agree but given the vile and viscous stuff most of the Russians and their friends say around here, plus their often genocidal wishes towards Jews, l like to do in Roman as the Romans do. But your posts here are a breath of fresh air. Saw you at Russia Insider but they banned me from responding to you. They didn’t mind my nasty comments but after I posted actual stats on the reality of the Russian economy and demographics, boom…banned.
Professor Cramer also warmed me about that. Call someone a “dummy” and its all good, but suggest that Putin is corrupt…
obviously u r deluded—it is Ukraine that created the misery, not Russia…r u a Nazi?
obviously have never been to Kazan—the Tatars fully support Putin…as do the Ostyaks, etc in Siberia…u r obviously ignorant of sociology, the concept of “mir”, “narodni,” ” sobernost”….the racist Jacki….is confused—today it is stylish and an advantage to be a Jew in Russia
Russia invaded Ukraine, stole Crimea, and destabilized Donbas while killing over 15,000 people.
The Tatars do not support Putin. They do not want to be a part of Russia. Their goal is for independence. The Tatars are not like Russians. They are a bright and ambitious people. They want to build a modern developed state.
Piss off troll
That’s just rude, Robert.
Bla bla bla! Take your anti Russian bs somewhere else
How is that anti-Russian?
u r too ignorant to comprehend this? LOL
I suppose everyone, even the undereducated people, has a right to their own opinions.
LOL…hey dingbat, that was a nice thought towards you Russians. Damn, some of you Putz Putin the Poisoner Trolls are really dumb, if entertaining.
Jake you weak bs artist
LOL…Come back in a couple of weeks and then crow, Igor.
Why would Russia need advice from the US?
Back in 2013/2014 Saudi and Obama thought it would be a good idea to manipulate the oil markets. Hoping to take Russia out. Believing the Russian GDP was reliant on 50% from the energy industry. Big mistake, they did not check Russia’s GDP Budget, which would have shown them the energy industry counted for just 16% of Russian GDP.
Russia can produce a barrel of oil for around $2, excluding transport. Production costs, where they use the ruble. Sales back then were in $US. Hasn’t Russia now dropped the $US?
How much does it cost the US to produce a barrel of oil? How much national debt has the world’s largest debtor nation got to pay back?
Saudi, can produce a barrel of oil cheaply, but, rely on oil to support the nation.
Do believe Trump should be asking Russia for some advice, with regards sorting out his economy. Dr Vladimir Putin PhD (in economics), would no doubt be able to provide a few tips.
the anxious insecure amerikans r hoarding toilet paper—they r full of feces…and guns–paranoid fearful people…in Russia there is no anxiety….only in Moscow where 5-6% of the people r now purchasing more kasha
as kustiricia recently wrote: “for an amerikan poverty in an embarrassment; for a Serb it is a Socratic symbol of family unity—of struggle”….of course, freedom hating amerikans covet comfort—their world class obesity is obvious…amerikans r too stupified, passive, emotionless and shallow to challenge their ruling oligarchy—Allainz 2015: USA, greatest wealth and income disparities of all nations examined…of course they employ the gini-coefficient, not the CIA lies found on wikipedia…in USA struggle is impossible…this informs why they lose all wars
Weak ruble is very advantageous for Russia selling its oil/gas on the international markets. Production costs become lower in $ terms but they can still sell it for dollars, which then buys even more rubles than before. This is good!