Putin just sparked an oil price war with Saudi Arabia — and US energy companies may be the victims
PUBLISHED SUN, MAR 8 2020 6:34 PM EDT
Brian Sullivan. CNBC

Russia rejected a proposal by OPEC to cut 1.5 million barrels per day of production.
In response, Saudi Arabia not only cut its forward crude price to Chinese customers by as much as $6 or $7 per barrel, but is also reportedly looking to raise its daily crude output by as many as 2 million barrels.
The move by the Saudis is both a market share grab and a loud signal to Moscow that it's done playing games.
American oil and gas workers and investors are caught in the middle of this epic ego battle.

The dramatic action is in response to a contentious, and ultimately failed, OPEC meeting in Austria on Friday. OPEC members laid out a proposal to further cut oil output quotas by as much as 1.5 million barrels per day.

OPEC itself was aligned on the deal, but non-OPEC member Russia said "nyet," effectively killing it. A source inside the negotiations tells me that as the two sides worked out production cut plans, in the end the "red lines weren't even close." The source added that the Russians "definitely don't want to continue to support shale" at least in part because the Rosneft sanctions were still "too raw."

It was only three weeks ago that the Trump administration imposed sanctions on Russian oil giant Rosneft for transporting Venezuelan oil. Secretary of State Mike Pompeo believes that in helping Venezuela sell oil, Russia is effectively propping up the Maduro regime. Rosneft is run by Igor Sechin, a former employee and close friend of Putin.

Connect the dots. Putin reacting to Trump. The Saudis, led by Energy Minister and son of the king Abdulaziz bin Salman, reacting to Putin. And American oil and gas workers and investors are caught in the middle of this epic ego battle.

It couldn't occur at a worse time. Coronavirus is already slamming global oil demand and crude prices have fallen 30% this year.

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https://www.cnbc.com/2020/03/08/putin-sparks-an-oil-price-war-and-us-companies-may-be-the-victims.html