What can Russia vs Saudi Arabia affect oil prices?

What can Russia vs Saudi Arabia affect oil prices?

The nerve contest has begun between Russia and Saudi Arabia, two major oil-producing countries, where both countries have made major financial decisions in the price war.

According to a report by Reuters, Saudi Arabia has reduced the price of crude oil, which has led to a record decline in global oil prices and also indicated an increase in oil production.

Foreign exchange reserves of the world's two largest oil exporters are worth $ 500 billion and are making alarming statements regarding their constituents.

Russia said in a recent statement that it could maintain oil prices from $ 25 to $ 30 a barrel for 6 years to 10 years.

According to the news agency, close sources said Saudi Arabia is also in a position to keep the price of oil up to $ 30 a barrel, but to increase the capital, crude oil exports will have to increase further.

Experts believe that the competition for both countries is pointless, which will cause major damage to their own economy as they will have to make difficult decisions.

Saudi Arabia pledges commitment

Sources close to the case say that Saudi Arabia's pledge to boost oil production to the world's largest oil-exporting state after Mohammed bin Salman rejected Russia's offer of OPEC. 

Hassanin Malik of Telemer says Saudi Arabia has to balance its national budget by about $ 80 a barrel, which is twice as much as Russia's.

It is to be noted that Saudi Arabia's foreign exchange reserves are $ 500 billion and the GDP ratio is 25%, which makes it difficult for the economy to borrow.

Saudi Arabia has raised debt to more than $ 100 billion from 2016 to tackle the effects of falling oil prices.

The government and the largest oil company, Aramco, issued international bonds, while the value of Saudi riyals fell below the dollar.

Reducing oil prices may cause the Saudi government to face further costs for its ongoing projects, which are part of efforts to modernize the Wali Aadhaar economy.

Monika Malik, a chief economist at Abu Dhabi Commercial Bank, said that with oil prices falling below $ 30 a barrel, Saudi Arabia's GDP deficit will double this year, with Riyadh's budget deficit estimated at 6.74 %.


Oil prices

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