Is Saudi Arabia’s oil market dominance Pyrrhic Victory?
“A Pyrrhic victory is a victory that inflicts such a devastating toll on the victor that it is tantamount to defeat. Someone who wins a Pyrrhic victory has also taken a heavy toll that negates any true sense of achievement or damages long-term progress.”
Since the 5thof March, in addition to the coronavirus and its detrimental effects on society and economies, the world has been witnessing an unexpected level of oil price wars. The failure of the OPEC+ meeting in Vienna has pushed oil and gas prices (as the latter are still partly linked to oil prices) into the abyss. The course taken by OPEC leader Saudi Arabia and Russia, a former partner in OPEC+, to threaten to glut the market with millions of additional barrels of crude oil and petroleum products has pushed global price-setting into the red. A possible meltdown in the sector is imminent if no way to mitigate the negative impact on oil producers or no diplomatic solution to get Moscow and Riyadh back to the table is found. International media have mostly been focusing on the negative outfall for US shale oil, mainly due to its overwhelming visibility and because most leading press agencies are based in the USA. At present, the main other players still seem to have been under-assessed, particularly Russia and Saudi Arabia. Other OPEC producers are not even mentioned at all on MSM. The fact that two of the three main oil producers are at war and heading to an uncertain future needs to be assessed in full before a possible solution can be found.