As the oil price war continues, markets are hanging on every word coming from Washington, Moscow and Riyadh, amid signs that diplomacy could be afoot. A statement by the Kremlin’s presidential spokesperson, that Russia would like to see higher prices, signaled that Russia might be willing to blink in the Russia-Saudi oil price standoff. It appears that the fall in the ruble is larger than Moscow expected, prompting them to use up foreign currency reserves at a faster clip than anticipated. Russia could also be finding it more difficult to sell its oil in China and Europe.
It’s happened several times before: geopolitical tensions between Saudi Arabia and Russia have led to a dramatic drop in oil prices in years past. But the breakdown in Saudi-Russian cooperation in oil markets over the weekend is strikingly different this time.