13.03.2020, 11:18
Expert Pointed out the Vulnerabilities of Saudi Arabia in a Price War
Source: OREANDA-NEWS
OREANDA-NEWS. The economy of Saudi Arabia is much more dependent on oil revenues than the Russian one. The two countries' cooperation in the OPEC+ deal was positive, but in the context of blackmail Russia will not accept new production cuts. This opinion was expressed by political scientist and journalist Mikhail Leontyev on the air of a Russian radio station.
“Our oil industry has proven that it can exist under conditions of sanctions, tremendous fluctuations. The Saudis have lower production costs than ours, uncritically, but lower because we also have very low prices at all possible real prices. They have huge socio-political the costs, their whole life, the reproduction of themselves, of the state, are completely based on oil revenues - they are much more vulnerable in this situation. We are ready to withstand this blackmail", he said. Leontiev noted that he commented on this situation as an expert, and not a representative of Rosneft.
According to Leontiev, the OPEC+ deal brought a positive effect for both countries. “However, at a certain point, Saudi Arabia decided to disrupt this dialogue. What happened was the usual ultimatum, blackmail”, he said. The political scientist noted that the reasons that forced Riyadh to take such a tough position are not clear.
“Our oil industry has proven that it can exist under conditions of sanctions, tremendous fluctuations. The Saudis have lower production costs than ours, uncritically, but lower because we also have very low prices at all possible real prices. They have huge socio-political the costs, their whole life, the reproduction of themselves, of the state, are completely based on oil revenues - they are much more vulnerable in this situation. We are ready to withstand this blackmail", he said. Leontiev noted that he commented on this situation as an expert, and not a representative of Rosneft.
According to Leontiev, the OPEC+ deal brought a positive effect for both countries. “However, at a certain point, Saudi Arabia decided to disrupt this dialogue. What happened was the usual ultimatum, blackmail”, he said. The political scientist noted that the reasons that forced Riyadh to take such a tough position are not clear.
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