How Increased U.S. Shale Oil Production Led to the Breakdown in Russia-Saudi Relations

A pump jack operates in an oil field in the Permian Basin in Texas, June 11, 2019 (Photo by Jacob Ford for Odessa American via AP Images).
A pump jack operates in an oil field in the Permian Basin in Texas, June 11, 2019 (Photo by Jacob Ford for Odessa American via AP Images).

Saudi Arabia’s decision to launch a price war in oil markets earlier this month could not have been more poorly timed, coming amid plummeting global demand for oil due to the COVID-19 pandemic. The Saudi announcement sunk oil prices to an 18-year low, near $20 per barrel, after five years at more than double that price, putting further downward pressure on already troubled financial markets. Saudi Arabia had gambled that by flooding the market and pushing down prices, it could punish Russia for refusing to cut its output, while recouping market share that had been ceded to U.S. shale oil […]

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