May 26, 2020

The low price of oil exacerbates the general crisis in Russia and causes a rifirrafe with Saudi Arabia


Correspondent. Moscow

Updated:

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The coronavirus crisis in Russia has coincided with the collapse of oil prices, whose export is vital for the country’s economy, which in turn has placed the ruble, the national currency, at its lowest value in recent years. Russian experts already warn that the state coffers will suffer at a time when it will be necessary to undertake a huge expense to face the Covid-19 and, even more, to clean up the economy once the pandemic subsides.

In early March, Russia vetoed the cut proposed by OPEC to stabilize crude oil prices, what led to its sinking. Since then, its value has not stopped falling, also taking into account that Saudi Arabia, which in principle agreed to reduce production, increased it and began to sell oil on the international market at a balance price, which caused unrest in the Kremlin. Moscow advocated leaving production as it was, without cuts, but also without excessive increases.

So the president Vladimir Putin, pressed by the economic situation in his country and under pressure from his American counterpart, Donald trump, has been forced to take action on the matter and, yesterday Friday during a remote meeting with his collaborators, he yielded and was willing to decrease the production of Russian black gold, just on the eve of the online meeting that will take place on Monday out the world oil cartel and its allies, OPEC. He spoke of a “preliminary” reduction in production of 10 million barrels per day of crude oil to, he said, “balance the market.” The ad shot up prices.

But Putin also said that those who they broke the agreement in Vienna last March 6 it was, not the Russians, but the Saudis, because they wanted, according to him, “to get rid of their competitors,” specifically the North American shale companies. These words have caused outrage in Riyadh. The Minister of Saudi Arabia PowerAbdulaziz bin Salman al Saud has dismissed Russia’s allegations as “categorically false” about Saudi Arabia’s alleged refusal to extend the agreement between OPEC countries.

Meanwhile, the coronaviruses in Russia continue to advance, although in a moderate way. According to the latest data on the evolution of the pandemic, the country as a whole has registered 582 new cases, bringing the total to 4,731 and the death toll to 43. In Moscow, the increase in those infected by COVID-19 has been 434, bringing the total in the Russian capital to 3,427 infected, according to a correct calculation, although the Moscow City Council gives the figure of 3,357, and 24 deaths.

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