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Remember that the initial fall in oil price was a supply shock (Saudi Arabia upping production) that was only exacerbated by lack of demand. If demand comes bac

• chii 7y ago
  But what's the saudis' end game? Are they really gonna try to starve out russia, and cause them to capitulate? Game of chicken till one country bankrupts? The saudis are losing money doing this (they have to eat into their reserves to fund the country). Russia at least has other industries, however small it may be.
  • lstodd 7y ago
    Russia has just lost about 20-30% yearly income in these first months just from the oil price war. Saudis cannot care less because they have about three times of Russia reserves nominally. In fact I suspect about five to seven times that, because Russia reserve structure is basically unknown. Saudis can certainly afford a year or three of having no income. This is on top of the virus panic (which just cut any remaining tax revenues). Russia, Venezuela, Iran for that matter are done for. EDIT: Which is why I think the whole OPEC+ deal went to the crapper. Middle East is able to weather this, others - not so much.
    • chasd00 7y ago
      I hope this doesn't mean war. I have a feeling Russia will take out capacity by force if it becomes an existential threat.
      • lstodd 7y ago
        No it does not. There is no one in Russia able to execute such a decision. There were some people in 2008 maybe, but that was almost 12 years ago. Arguably there isn't anyone like this in the rest of the world either, but I digress.