Could it have been better handled? Sure, for starters Saudis and the United States could have "tuned up" quotas between themselves to spare oil market an unprecedented shock it continues to experience. In the end, oil market IS a global market. But it is what it is and we all have to look at the reality of it all, because once Russia entered the fray it became not just about the oil price but the change of the rules of global oil production and trade. And I mean real change. This change did happen, as was predicted, because the issue became not HOW Russia will wipe the floor with Saudis, that was clear from the get go, the issue was HOW Russia will convince the United States to "join the party" and try to behave itself. In the end, as I stated not for once, for Russia the United States is a strategic "partner" and another superpower for who different set of rules applies. In other words: Russia can harm the United States, but she is absolutely not interested in burying the United States because understands catastrophic consequences of such a collapse. Per Saudis, Russia doesn't care if this country disintegrates or survives, both scenarios can be handled. But oil, well, is a separate issue. Russia wanted global cartel, OPEC++ which would see the United States joining in which means a radical change of the game, in which the United States has responsibilities, not just interests. Well, guess what!?
That is much better. Not quite there yet, but much, much better. Trump called Putin and Ria gave a dry summary (in Russian) of that conversation which, it seems, was rather pleasant as it should be. Russia was getting what she wanted, getting US at the table. Well, of course, all this is very reminiscent of feast during the plague, but it wasn't Russia who drove the market to this state. Some even call it Russia's Pyrrhic Victory, and they may even have a point, but in the larger scheme of things very many would love today to be in the position of Russia.
It is almost anti-climactic. And as rumor has it, the United States will cut something around 1.8 bpd in addition to taking up part of Mexico's quota. Judging by a surprising lack of new updates on Yahoo Finance something IS afoot there. Obviously, all of it is too little, too late and funeral pyres for oil industries of many countries may start burning pretty soon, but then again--nothing personal, just business. It is just the start of the process and who knows where will it lead. Oil prices are crashing no matter what now and we all know what it means, but at least some fuzzy shape of the global oil cartel begins to emerge and that is exactly what Russia demanded. In a funny twist, Putin and Trump also discussed in their phone call exploration of space. Why not. Russia has some interest in seeing the United States getting used to new world order. As Scott Ritter noted:
You see, once the military threat from the United States was addressed in the most dramatic way, new rules started to get enforced. Indeed, Russia can handle any sanctions the US can introduce, but Iran needs urgent help--she need IMF loan to fight Covid-19 pandemic, she also needs all help she can get including from EU which is beginning to cautiously bypass US sanctions on Iran. Venezuela needs help, Yemen's slaughter supported by the US also needs to stop. So, you see--there are so many issues to discuss between Russia and the United States. As old Arabic proverb says: if the mountain doesn't go to Mohamed, Mohamed goes to mountain. Russians are proud people but when is needed they go to mountain and when they go... well, you know this blog for 6 years, don't you? It documented it thoroughly. It is a new brave world out there and we all need to survive its unfolding. Playing by the common sense rules increases chances of survival dramatically. And that is the name of the game.
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