In breaking with Saudi Arabia and the rest of OPEC on new oil output cuts, Russia’s real objective is to squeeze US oil drillers, particularly those operating in America’s shale basins. Russia sees the global outbreak of COVID-19 as a moment of extreme vulnerability for notoriously unprofitable frackers across Texas and North Dakota. These firms have made the US the top oil producer in the world, but have racked up hundreds of billions in debt along the way – debt that has become increasingly unsustainable and led to an increasing amount of bankruptcies in the last year. In seeking to bring Russia back to the table, Saudi Arabia has decided to bring on more supply of their own, generating even more downward pressure on crude prices.
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