Vitaly Portnikov: the Oil war. The calculation or miscalculation of the Kremlin

Виталий Портников: Нефтяная война. Расчет или просчет Кремля

The decline in oil prices and the collapse of the Russian ruble is not only the result of objective economic conditions that resulted from the crisis. First and foremost the result of Russia’s refusal arrangements with other exporters.

When oil prices declined in the recent past, the pricing was difficult to influence because of the lack of coordination. Both Russia and Saudi Arabia watched helplessly as the prices go down. But then managed to create a mechanism for joint decision-making, which has demonstrated its effectiveness in recent years. This mechanism Russia and destroyed when its energy Minister Alexander Novak has refused to reduce oil production.

And now it can happen anywhere. Price war has already begun, a barrel can cost $ 20, the ruble will soar to the heavens in relation to world currencies. In Moscow, however, did it consciously. And it remains to understand – why?

The answer to this question is unlikely to be unequivocal. The Kremlin could decide that the reserves are sufficient to afford a new war – this time energy. To weaken the position of the United States to shale oil. To strike at Saudi Arabia. To solve some problems of the Russian oil companies: the interests of the closest ally of Putin, Igor Sechin can be a much more important motive than the interests of the state. To fully understand the meaning of the decision of the Kremlin’s not that simple.

But just understanding the other – it is a real war, not a game in the computer. And in the present war can be and deficiencies situation can not occur, as expected in Moscow. Saudi Arabia has accepted the challenge and began the systematic reduction of prices, which could be a blow to Russian oil. May interfere with the effect of a coronavirus. You can work the Domino effect when a market decline will be impossible to manage.

When Russia started the First World war, its government also did not expect that the victim of this decision will be the state itself. And such examples in history is enough. The Kremlin can achieve its goals – but too high a price, which turns out to be unsustainable for the Russians and provoke a collapse of the regime. Or maybe just to lose a price war with other exporters, and soon to return to the familiar mechanism of price agreement. This is today said the Russian energy Minister, who stressed that the refusal to extend the agreement to reduce production does not exclude further interaction.