Kwork.ru - услуги фрилансеров от 500 руб.
Home / economy / Russia is on the threshold of a new oil war

Russia is on the threshold of a new oil war

Россия стоит на пороге новой нефтяной войны

At the end of the month, the market of “black gold” was again under pressure. One of the reasons are minor, but noticeable, decline in world oil prices — increased tension in relations between the US and China. Earlier, the two largest economies in the world are in conflict because of the coronavirus, which, according to trump and Secretary Mike Pompeo, was allegedly artificially created in the laboratory of Wuhan. Now in the list of claims added another paragraph.

For consideration at the next session of vsekitajsky meeting of national representatives of the 13th convocation in Beijing had passed a new law on national security in Hong Kong, where the Central authorities plan to create special state bodies.

Kwork.ru - услуги фрилансеров от 500 руб.

Against this strongly supported the Washington. The Republican majority leader in the Senate Mitch McConnell threatened to review U.S.-China relations if Beijing continues to put pressure on the Hong Kong. “Powerful” response, China promised to give personally trump the specific steps he promises to inform the rest of the week. Note that on may 28, the law still was adopted, which opens the way to a new stage of confrontation between the US and China. The mood of traders is also affected. “The threat of a new trade war between the US and China is unlikely and could spell disaster for risk assets,” — said oil broker Stephen Brennok.

According to analysts, oil prices also affected the data on a more rapid than expected, growth of stocks in the United States. However, overshadowed by the publication of “Bloomberg”: the publication reports that the participants of the transaction OPEC+ again ran a black cat.

On 10 June representatives of the countries-exporters of oil will host the next summit, which will discuss further steps to stabilize the oil market. It would seem that there is nothing to discuss — the terms of the agreement clearly spelled out and agreed by all parties. But in the case of consensus, they can be corrected. Several States expressed such a desire and want to extend the maximum quotas for may and June, before the end of the year. While their opponents favour the gradual increase in production as prescribed in the current edition of the agreement OPEC+. According to Western media, the “frontman” of the second group is Russia. And understanding with the Saudis until she finds.

That Riyadh insists on the necessity of hardening the transaction, there is no doubt. Informed middle Eastern monarchy unilaterally (probably under US pressure) took the unprecedented step -decided to remove from the market one million barrels of oil per day. Her example was followed by Kuwait and the UAE, while the rest remained on the sidelines. Apparently, according to the sheikhs, now the ball is on Russia’s side — she must agree to the extension of existing quotas.

Fundamentally the same situation, by the way, occurred before the outbreak in March oil war. Then Russia was determined to follow the previously concluded agreements, and the Saudis insisted on the revision of the transaction OPEC+ in further reducing production. What happened next, to remind you do not need. Given that relations between Moscow and Riyadh still cannot be called idyllic, any controversy about a new agreement is fraught with repetition of the March scenario. Although this probability is still small. Saudi Arabia, after all, the first threw a white flag and requested an emergency meeting of OPEC+. Natural result of the policy of Muhammad bin Salman, who not only beheld the failure of his “oil of blitzkrieg”, but fell into disfavor of the administration of the President of the United States.

People from the entourage of trump, according to authoritative Western mass media accuse Saudi crown Prince betraying and trying to destroy the us shale industry. All of this will deter Salman from repeating his own mistakes. If you make adjustments to deal OPEC+ will not work, then the best solution is just to do it.

However, whether Russia opposes Saudi initiative? The official position of the Kremlin on the eve of a new round of talks remains unclear — neither representatives of the energy Ministry, nor other officials clear the do not allow comments. Solid “water”: you need to watch the situation, we need to work together…

In fact, the message of “Bloomberg” is the only source of information about Russia’s unwillingness to tighten the conditions of the world oil with the Saudis. But this rumor many have taken for granted. “The rally of oil stopped after Russia signaled that they want to start production in July — a sign that the battle for market share will resume, since oil demand will improve. Comments on mitigating the cuts in July served as a reminder that higher prices and improved demand for oil is likely to face with the fact that the transaction OPEC+ is not observed”, — predicts analyst Edward Moya. Not quite clear what signals and “review of Russia to mitigate the cuts in July” refers to.

Perhaps Moya has in mind the comments of representatives of private oil companies, which believe that OPEC transaction+ does not need to be tightened. But the official speakers from Russia, they are not. Those who are really authorized to give signals while that adhere to their favourite tactic of the Kremlin — waiting.

“The market was supported by rapid observance by Russia of quotas agreed within the framework of the Alliance OPEC+. (…) However, it turned out that it was decided to mitigate the production decrease in July. Despite the fact that this corresponds to a scheduling agreement, this disappointed the market”, — said in a note analysts, published on 28 may. Their findings also sound rather strange — even “Bloomberg” claims that the decision was already made. Moreover, this solution could not disappoint the market who don’t know the details of behind the scenes negotiations between Russia and Saudi Arabia.

In contrast to the “Bloomberg” Russian Newspapers were quick to share their own insides. TASS and RIA “Novosti” with reference to sources reported that the energy Ministry and oil companies are discussing the possibility of tightening OPEC deals+ on the restriction of production. According to publications, this was discussed at a meeting on may 26. One option is the extension of existing quotas before the end of summer.

Of the likelihood of such developments with reference to three sources in the oil industry also reports “Kommersant”. His companion notes that the Russian companies there is no consensus on the question of increasing the transaction OPEC+. Obviously, the Kremlin also has not yet decided on the final solution. But he is under pressure from Saudi Arabia, dissatisfied with the current dynamics of oil prices (the budget of the Kingdom aims to $ 80 per barrel).

His version of the events shared Reuters: Russia has not yet agreed to the proposal of Riyadh to extend a maximum quota for production cuts until the end of 2020. The government sort of supports the position of the Saudis, but a number of oil companies opposed.

Apparently, to calm the agitated market, Putin and Salman may 27, held a telephone conversation. On the website of the Kremlin, he described sparingly: the leaders continued exchanging views on the situation on the world energy market, and stressed the importance of joint efforts to reach a deal OPEC+, agreed on further close coordination. “The question is, what details were agreed upon, if any, was agreed. However, the fact that Russia and Saudi Arabia seem to be on the same wavelength, is a good omen for the next meeting of OPEC+”, — the analyst and consultant Mohammad Darvaz.

It cannot be excluded that behind the screen of “close coordination” is fraught with serious contradictions. At the next summit of the oil cartel, they can manifest itself in all its glory. But a new round of escalation in both Moscow and Riyadh will hold the fact that the epidemic of the coronavirus continues to have a detrimental impact on the global economy. Before you sort things out with each other, you need to fend off a common enemy.

© 2020, paradox. All rights reserved.

Check Also

LA Mayor Garcetti crowned Covid-19 ‘dictator’ after shutting off utilities at TikTok star’s Hollywood party mansion

In a tweet, Garcetti announced that he had instructed the city to disconnect utility services …

Leave a Reply

Your email address will not be published. Required fields are marked *