Saudi Arabia has not only called the end of Russia’s prominence as a global oil behemoth, but anticipates that Russia’s oil exports “will have declined heavily if not disappeared” within the next 19 years, Mohammed bin Salman said in a recent interview with Bloomberg.
When asked whether Russia and Saudi Arabia had made a backroom deal to increase oil production, MbS was more tight-lipped, saying only that Saudi Arabia was “ready to supply any demand and any disappearing from Iran.” With Russia out of the game, Saudi Arabia would have plenty of oil demand to service, according to MbS.
MbS did not comment on his rationale for Russia’s exit as a major oil producer.
Russia’s oil production in August of 11.21 million barrels per day, near the post-Soviet era high reached the month prior to signing the OPEC+ deal that curbed its production. The 11.21 million barrels places the country in second place of the most prolific oil producers in the world, behind the United States, who overtook both Saudi Arabia and Russia earlier this year, according to EIA data as cited by CNN.
While America managed to rise from its third place seating in 2018, it did so unencumbered by the production-curbing agreement that both Saudi Arabia and Russia agreed to. Gazpromneft earlier today said it was no longer restricting its oil output, although it doubtful that either Russia or Saudi Arabia can reclaim their top spots.
Saudi Arabia has been at the forefront of oil news in recent weeks—almost neck and neck with Iran—as traders try to anticipate just how much spare oil production capacity Saudi Arabia has—if any—and if that spare capacity, whether it’s zero or a million barrels per day, will be sufficient to offset any losses sustained from Iran and Venezuela.
By Julianne Geiger for Oilprice.com
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