Oil war: it’s too late to speculate who is “weaker” and who is “stronger”

US, WASHINGTON (ORDO NEWS) — Coronavirus remains an unknown and most dangerous enemy to all. In the current crisis situation, it is unlikely that anyone will achieve much success if he argues in style who is “stronger” and who is “weaker”. In the meantime, humanity is paying a cruel price, for which sometime someone will have to bear historical responsibility.

On April 1, the OPEC + deal to reduce oil production was terminated. She stopped in a situation where oil prices on the world market broke all the negative records. Lost control over the process. There are no precedents, there are only stories, each of which needs to be deciphered and analyzed, which is difficult due to the lack of transparency.

The head of the Russian Ministry of Energy, Alexander Novak, said that at the start of the so-called oil war, no one expected a pandemic that would lead to an unprecedented drop in oil demand. According to Novak, “ten times more than the expected reduction in production within the OPEC + alliance,” and “the main factor that influenced the reduction in prices is associated with the spread of coronavirus worldwide and the unprecedented measures that governments are taking to limit economic activity in countries. ” Hence the conclusion: the fight against the pandemic becomes primary, and only the victory of mankind in this battle can change the situation in the oil market and in the entire world economy. That is, the goals defined by the logic of the “oil war”, as well as the external factors and circumstances that accompany them, began to be replaced by other tasks. It is necessary to search for effective means and mechanisms of interaction to eliminate the main threat. Nobody was ready for such a course of events.

When US President Donald Trump announced that he would intervene in the “oil war” at the “right moment” and be able to put pressure on Russia and Saudi Arabia to change the situation, it seemed that Washington was not only over the fray, but also controlling the course of events. In this regard, the American edition of The Wall Street Journal promoted a version according to which Trump pushed Riyadh to enter the “oil war”, preparing a “second blow” against Russia. The first took place in the form of sanctions against the Nord Stream 2 gas pipeline. Second: play on oil production in order to “create a direct threat to the stability of the Putin regime, given that oil revenues provide 40% of the Russian state budget.” In doing so, The Wall Street Journal hints that the White House was ready for tactical purposes to sacrifice shale mining in the hope that, according to an expert from the Berlin Science and Politics Foundation (SWP) Janis Kluge, that “there will be no extinction of shale mining, production will resume under the necessary conditions.” At the same time, Russia was invited to “sacrifice Venezuela and Iran” with a long-term geopolitical perspective.

The logic of such reasoning suggests that the Saudi card was played out and Riyadh was displayed under a probable blow. It was Trump who began contacting the Saudis and Moscow over the phone to talk about stabilization in the oil markets. And at a meeting in the White House with the leaders of the American oil industry, he said that he had recently talked with the leaders of Russia and Saudi Arabia and was convinced that the two countries would be able to reach an agreement within a few days, which would reduce production and contribute to higher prices. However, an important nuance appeared that American experts drew attention to, which the recent short-term surge in oil prices began to be associated with two factors: Trump’s statements and the fact that “China has accelerated the purchase of crude oil for its strategic reserves.” And this is when, as experts state.

The uniqueness of the current situation is that even if Trump’s idea to create the “troika” of the USA – Russia – Saudi Arabia or restore OPEC +’s activity is realized, it will take a long time before an agreement can be made to reduce oil production and normalize the global situation the market. Therefore, the statements of politicians about their readiness for discussion and cooperation in order to stabilize energy markets are no more than ordinary political polites. No one has a real plan for getting out of a difficult situation. But there is something that does not cause controversy: every day and month, the lockdown will reduce the volume of national economies and the global economy as a whole and exacerbate related factors – unemployment, depression and suicide. According to Gerd Antes, professor at the Medical University of Freiburg, “Today, doctors are beginning to dictate everything, not politicians and economists.” They say that restrictive measures will not last “for a couple of weeks,” but “until the onset of summer,” perhaps “until the end of the year” or “will last two or three years.”

Coronavirus remains an unknown and most dangerous enemy to all. The war with him is not in the oil fields. It is no coincidence that Novak today means the futility of any negotiations in this direction. And Saudi Arabia called on the countries participating in the oil production reduction deal to “meet urgently to reach a fair agreement that could restore the desired balance in the oil markets.” True, Riyadh submits this decision as a favor “in deference to the request of Trump and friends in the United States.” And this is at a time when all countries must act together, since the problem of low oil prices is not a priority in the current crisis situation and it is unlikely that anyone will achieve much success in this field, especially alone. Even if you argue in style who is “stronger” and who is “weaker”. Humanity pays a cruel price.

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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.