9 March, 2020
 Posted by Ac2ality
3

The Saudi Arabia-Russia oil war, explained in 175 words

The Saudi Arabia-Russia oil war, explained in 175 words. Yesterday, they had their largest single-day drop since 1991. Why? OPEC couldn’t convince Russia to cut production amid a decrease in global demand due to the coronavirus.

Wtf is OPEC?

It’s the Organization of the Petroleum Exporting Countries. It’s a group of 14 countries that together produce almost half of the world’s crude oil (Mideast countries like Iran, Saudi Arabia, Iraq, African nations like Algeria, Angola, Congo, and others like Venezuela.

OPEC’s goal.

To keep oil prices stable by coordinating on policies and how much oil they produce at one time. For example, if they produce a lot of oil and there’s not enough demand, prices go down (and viceversa).

So what happened now? 

OPEC proposed reducing oil production as demand is in decline (think: coronavirus). The problem. Russia (a major oil producer & OPEC’s ally) said no (we still don’t know why).

The consequence: oil price war. 

Saudi Arabia didn’t take too kindly to Russia’s decision and responded by slashing its export prices to start a price war with Russia (this way, countries would prefer to buy Saudi’s oil).

3 comments on “The Saudi Arabia-Russia oil war, explained in 175 words”

  1. Steven
    Reply

    Saudi Arabia is obviously going to fuck Russia over, They have much more oil

  2. Stev
    Reply

    Sure. But both of them are going down… Saudi relies 100% on its oil industry, especially Amraco and it shouldn’t be playing like this just because of rivalry

  3. Cassandra
    Reply

    Thumbs up for this page and this post! Thank you !

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