OPEC Deal Is High Risk for Both Saudi Arabia and Russia
OPEC Deal Is High Risk for Both Saudi Arabia and Russia
(Bloomberg) -- With OPEC pre-announcing a big production cut for it and its allies without the support of Russia, Saudi Arabia appears to be trying to corner Moscow into either supporting it or facing the blame for a price collapse. But that’s a very risky strategy.
President Vladimir Putin doesn’t react well to being cornered. And Riyadh has effectively painted itself in a corner, too. If Russia at the OPEC+ meeting tomorrow says nyet to the proposed cut of 1.5 million barrels a day, and puts forward a smaller reduction, Saudi Arabia will have two options: Either bridge the gap itself, cutting its own output even more, or let the whole deal collapse. Both Riyadh and Moscow are now in a corner.
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To contact the reporter on this story: Javier Blas in London at jblas3@bloomberg.net
To contact the editors responsible for this story: Emma Ross-Thomas at erossthomas@bloomberg.net, Eric Coleman
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