Paul
Goble
Staunton, April 14 – Economically,
the oil price deal announced by OPEC+ two days ago was “not a defeat for Russia,”
Sergey Shelin says; “but in a political sense, this was a capitulation that our
regime has not once made in the 21st century, a clear defeat for
Putin and his team that everyone can see.
Oil prices have collapsed because of
a collapse in world demand, not because of Moscow’s ill-timed effort to affect
them, the Rosbalt commentator says; and the agreement that has been reached is
nothing more than an effort to share the pain of those declines among oil-exporting states (rosbalt.ru/blogs/2020/04/14/1838298.html).
But the unprecedented deference
Putin showed to the Saudis and especially the speed with which he backed down
from his position is a clear political defeat of “the former ‘energy superpower’”
which has now humbly agreed to become “a part of a union of several dozen oil-exporting
countries, led in fact by the United States and Saudi Arabia.”
Despite what many Russians think, “oil
prices fell not as a result of the March price war” Moscow started “but because
the coronavirus epidemic in the course of a couple of months reduced demand for
fuel by 20 million barrels a day or 20 percent. This is a historic record.” The
exporters have been compelled to respond, but why did Russia act as it did?
The reason Moscow entered into an
oil war is that it assumed it could win, but of course, “the probability of
success from the very beginning was equal to zero” because demand continued to
fall making the Russian play meaningless and even counterproductive. They
fooled some in Russia but few elsewhere into thinking they not the Saudis and
the US were dominant.
The deal that emerged was not that
bad for Russia, but the fact that Moscow hurried to agree rather than holding
out for longer suggests that the Kremlin feared that if it didn’t defer, the
West might impose sanctions on Rosneft, a political threat it couldn’t tolerate
but one that its failure to tolerate showed its own much-reduced political
position.
Thus, Shelin continues, what has
happened is “a political and not an economic defeat of our regime.” Its failed
ploy highlighted what Moscow has most wanted to conceal: it can’t always set
the weather. In certain areas, including oil, the market and other players are
simply too powerful for it to do so.
No comments:
Post a Comment