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A Geopolitical Time Bomb In Europe

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Who Will Win The Oil Price War?

Time To Blink In COVID-Infected Oil Price War

As the oil price war continues, with the Saudis holding out and flooding the market with oil, the next logical stage is full-beyond-capacity storage facilities. It’s a situation that has some worried we could see oil drop below $10 a barrel. 

Last week, we said that our high-level sources are confident that the Saudis will not let this completely destroy the American shale patch, while the Russians are gunning for just that. Our sources still stand by that scenario from the Saudi perspective, while the Russians are getting media out there to the effect that the U.S. is about to lose the war over European market share. 

But what is happening here is that the oil price war is being compounded by the coronavirus and a near-global slowdown of activity, so we’re going to reach $15 oil a lot faster than we would otherwise.

The difficult part to predict will be the psychology of MBS and Putin - two very strong personalities who cannot back down without a clear, agreed-upon path that makes it look like they both won in different ways. 

But Russia stands to lose nearly $40 billion in this game, and the Saudis can withstand more. MBS will force Russia to blink first, even if Moscow insists it’s going to keep pumping all the way to $10 oil. Saudi Arabia on Wednesday said it would pump 12.3 million bpd into the market over the coming months as a direct challenge to Russia. The…





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  • RICHARD FITOUSSI on March 20 2020 said:
    The Saudis and the Russians are not really at war, don't believe it for one moment, do you really think they would go into this pricing dispute without calculating and predicting a profitable outcome resulting from shorting of their own commodities, they have the means to hire very smart specialists with experience of swimming in those murky waters, before the whole thing started. Very well orchestrated I must add! and above all very quiet!
    The real losers are the Western Canada Tar Sands Producers and the fracking operators in the North American continent. Also, amazing how fast the USA strategic reserve was filled and continued to be filled with this cheap oil.
    1973 was the last time I witness something like that, however, that one was not pre-organized.
  • Brett Blaikie on March 20 2020 said:
    there are multiple arguments and interests: end of the day Russia pays their workers in rubles
  • Victor Edwards on March 21 2020 said:
    The people of the world win, for they will now suddenly realize that the world can indeed survive without Big Oil. This is a turning point for the demise of fossil fuel sources of power, and the disappearance of internal combustion engines, an idea that has passed.
  • Bob Loblaw on March 22 2020 said:
    No one will win is a pretty good bet.

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