US, WASHINGTON (ORDO NEWS) — On Friday, Dmitry Peskov told reporters that relations between Moscow and Riyadh remain strong, despite disagreements, which, according to him, are not a price war.
“There are no price wars between Russia and Saudi Arabia,” the Russian state news agency TASS quoted Peskov as saying. “There is a very unfavorable pricing environment for many countries.” Peskov noted that between the two countries “good relations, partnerships” still exist.
Earlier this month, when the two countries disagreed on proposed restrictions on production, oil prices fell sharply. Overcoming the situation of overproduction and reduced demand due to coronavirus, the OPEC cartel, which is dominated by Saudi Arabia, ordered a reduction in production in order to maintain prices.
But Russia, which for three years collaborated with OPEC under the OPEC + agreement, did not agree to cut production, apparently seeking to capture a large market share.
In response, the Saudis increased production and flooded the market, knocking down oil prices of all producers.
American manufacturers also suffered. In recent years, the United States began to fully provide itself with oil and became the world’s largest producer thanks to the shale boom.
But many manufacturers have huge debts, and long-term price cuts may force them to go out of business.
On Thursday, US President Donald Trump said he would intervene in the price war at the “right time”. The Wall Street Journal reported that the administration – under pressure from US firms – is considering the possibility of exerting diplomatic influence on the Saudis and imposing new sanctions on Russia to put an end to the price war.
However, Peskov said on Friday: “We do not think that anyone should interfere in these relations.”
Trump also said that the current situation is “very ruinous for Russia, because if you look, their whole economy is based on that.”
Peskov did not agree with this, although he admitted that the situation was “very unpleasant.” He noted: “Speaking of the fact that this is a disaster for Russia, one probably can’t agree with this in the medium term, because both our president and our government have repeatedly stated that for several years we have had a solid margin of safety, which will provide an opportunity to fulfill all social obligations, development plans and so on. ”
Meanwhile, according to the publication, lobbyists of American manufacturers began to attend meetings in the White House, as well as in the Ministry of Finance and the Ministry of Commerce, to ask for help. According to many people who, as the Wall Street Journal writes, are familiar with the circumstances of these meetings, lobbyists in particular are asking for diplomatic intervention and procurement for America’s strategic oil reserve.
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