The Oil Price Crash: Bad News for Putin's Ambitions in the Middle East
by Con Coughlin • March 12, 2020 at 5:00 am
Last week's dramatic fall in the value of global stock markets was prompted, in part, by Moscow's decision at the end of last week to end its cooperation with the Saudis to agree to new oil production targets, a measure designed to maintain global oil prices at a sustainable level.
The Saudi response, to launch an oil price war against Moscow, was clearly not the outcome the Russians had been anticipating.
"The oil price war is going to be a game changer for the Middle East," a senior advisor to the Saudi royal family told me earlier this week. "The Russians rely on their oil revenues to fund their military activities in Syria. But if the oil revenues collapse, then they will no longer be able to afford these long and costly wars."
Russia's refusal to reach an agreement with Saudi Arabia on global oil quotas could ultimately have a disastrous impact on the Kremlin's long-term ambitions of extending its influence in the Middle East.
Last week's dramatic fall in the value of global stock markets was prompted, in part, by Moscow's decision at the end of last week to end its cooperation with the Saudis to agree to new oil production targets, a measure designed to maintain global oil prices at a sustainable level.
The Saudi response, to launch an oil price-war against Moscow, was clearly not the outcome the Russians had been anticipating.
Thus, instead of guaranteeing Russia's market share in the global oil market, which had been Moscow's primary objective at last week's meeting of OPEC and non-OPEC producers in Vienna, the Russians now find themselves involved in a bitter price war with Saudi Arabia, the world's second-largest oil producer and largest oil exporter.
