US – Russia oil fight
2 mins read

US – Russia oil fight

Russia worries that extending production cuts will help US shale oil producers gain more advantage from higher oil prices.

About a year ago, a US oil industry leader with close connections to the political world said that the country’s shale oil industry would escape difficulties in 2018. He said that US economic growth would be

That growth means Saudi Arabia will get closer to maximum production, and will no longer pose a significant threat to American shale producers.

According to this view, American companies can gain more market share in the future without fear of falling prices.

The question now, though, is if Russia changes policy and boosts production, what will that mean for Saudi Arabia and American shale oil producers?

Despite being at a disadvantage compared to the United States and Russia in adding new mining areas to its oil fields, Saudi Arabia has not given up its leadership role in the oil sector.

Saudi Arabia’s steadfastness towards the above agreement was not initially reciprocated by Russia, as shown by Moscow’s unequivocal statements before the OPEC meeting in November 2017.

Russia’s worry now is that extending production cuts will help US shale oil producers gain more advantages from higher oil prices.

An oil field in Khanty-Mansiysk City, Russia Photo: REUTERS

Any increase in Russian output would compete with similar moves by the United States.

They forecast that total US oil production could increase to over 11 million barrels/day in the next 2 years.

At this time, production disruptions in Venezuela, the UK, and Iraq, combined with Middle East instability, are benefiting oil prices.

However, the real fight for oil market share will likely take place between the US and Russia, with profound geopolitical implications.

The potential conflict over oil market shares is vital to Moscow’s power.

In the past, Russia’s influence and economy were damaged when the US, Saudi Arabia and Qatar began to attack Moscow’s energy income.

Currently, Russia seems to still cooperate with Saudi Arabia to stabilize the oil market.

According to Ngo Sinh

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