British Middle East Eye website revealed that the oil price war between the Kingdom and Russia was preceded by a verbal argument between Crown Prince Mohammed bin Salman and Russian President Vladimir Putin.
A report by author David Hurst said that Bin Salman was aggressive during a phone call with Putin before the OPEC+ meeting on the sixth of last March about cutting production before he decided to flood the oil market.
The website reported that bin Salman gave an ultimatum and then threatened that if he did not reach an agreement, the Kingdom would launch a price war, and that Putin rejected the ultimatum, then the call ended badly.
The site indicated that Bin Salman and Putin’s call was made with the blessing of US President Donald Trump through his last adviser, Jared Kushner.
The report considered that the strong dispute between the Kingdom and Russia over oil production dispelled months of calm diplomacy between the two parties, when Putin seized the opportunity not to respond to Trump’s attacks on Saudi oil facilities in Aramco with drones and Iranian cruise missiles last September.
On the ninth of last month, oil prices tumbled about 30% after Saudi Arabia reduced its official prices for selling crude, and laid plans for a significant increase in oil production next month, to begin a “price war” with Russia.
Prices fell by about a third after the Saudi move after Russia refused to implement another major production cut proposed by OPEC to stabilize crude markets, which were affected by fears of the economic impact of the Coronavirus.
On the other hand, the official news agency (SPA) has published several reports on contacts between King Salman and his son Muhammad with Putin during the last period, to find out the efforts made to stabilize oil prices in the markets.
The Crown Prince received a call from the Russian President on the 10th of this month, during which he reviewed the efforts exerted to stabilize and maintain energy markets to support the growth of the global economy, and stressed the importance of the cooperation of all producing countries in this, according to the official agency.
The Kingdom and OPEC+ had also reached an agreement on April 12th, to reduce oil production by 9.7 million barrels per day.
The historic collapse in American oil prices has caused panic in the Kingdom, with the repercussions of the economic crisis being severely affected by the spread of the Coruna virus and the collapse of oil revenues.
The price of a barrel of US oil (West Texas) for May contracts fell to the bottom by about $37 minus zero, the day before yesterday, a decline of 306%, its lowest level in its history.
The crumbling of oil has exacerbated the Kingdom’s crises in light of the expected sharp decline in financial revenues, and Riyadh is on the cusp of a record deficit in its budgets.
Observers say that the Kingdom’s budget will be exposed to an unprecedented historical fiscal deficit this year due to the multiple wars it faces on all fronts.