Saudi Arabia and Russia locked in war of words over oil price collapse

Oil prices dropped sharply after the so-called OPEC+ group of countries, including Russia, failed to agree to production cuts in early March.

The disagreement has sparked a price war that has seen the oil price drop to 18-year lows, as Saudi Arabia threatens to pump at a record-breaking pace to seize back market share even as the coronavirus pandemic has caused demand to drop off a cliff as airlines worldwide stop flights.

International benchmark Brent crude fell to around $24 a barrel, compared to prices of over $70 a year ago.

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Prices rebounded slightly after US President Donald Trump tweeted that Saudi Arabia and Russia had agreed to significant production cuts, but the animosity between the two oil giants could imperil such a deal emerging from a planned teleconference on Monday.

Saudi Arabia's anger was evident in two statements released on Saturday by the kingdom's state-run Saudi Press Agency. The first came from Saudi Foreign Minister Prince Faisal bin Farhan under the headline: "Statements Attributed to One of Russian President’s Media Are Completely Devoid of Truth."

"Russia was the one that refused the agreement, while the kingdom and 22 other countries were trying to persuade Russia to make further cuts and extend the agreement," the prince said.

He also said an alleged Russian contention that "the kingdom was planning to get rid of shale oil producers" was false as well. US shale producers have made America one of the world's top producers, but they've been hurt badly by the price collapse. Trump has met with concerned producers about that.

Prince Faisal did not identify the story, nor the outlet he was critiquing.

A second statement came from Saudi Energy Minister Prince Abdulaziz bin Salman, one of King Salman's sons. The prince criticised Russian Energy Minister Alexander Novak by name for suggesting Saudi Arabia wanted to cut out shale producers.

The prince "expressed his surprise at the attempts to bring Saudi Arabia into hostilities against the shale oil industry, which is completely false as our Russian friends recognize well", the statement said.

Saudi Arabia's statements likely seek to defuse any possible confrontation between the kingdom and Trump, who tweeted Thursday that Moscow and Riyadh "will be cutting back approximately 10 Million Barrels" without elaborating. Trump's tweets and public comments have affected oil prices in the past.

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