Russia's status as a petrostate was a major factor in a recent Russian decision in opposition to petrostate Saudi Arabia. Ilya Arkhipov et al report in Ilya Arkhipov et al, Putin Dumps MBS to Start a War on America’s Shale Oil Industry Bloomberg/Yahoo! Finance 03/07/2020:
Russia’s energy minister walked into OPEC’s headquarters in central Vienna knowing his boss was ready to turn the global oil market upside down.Alexander Novak told his Saudi Arabian counterpart Prince Abdulaziz bin Salman that Russia was unwilling to cut oil production further. The Kremlin had decided that propping up prices as the coronavirus ravaged energy demand would be a gift to the U.S. shale industry. The frackers had added millions of barrels of oil to the global market while Russian companies kept wells idle. Now it was time to squeeze the Americans.After five hours of polite but fruitless negotiation, in which Russia clearly laid out its strategy, the talks broke down. Oil prices fell more than 10%. It wasn’t just traders who were caught out: Ministers were so shocked, they didn’t know what to say, according to a person in the room. The gathering suddenly had the atmosphere of a wake, said another.Now Russia has changed course on this. And Saudi Arabia has responded with a change in its policy (Javier Blas and Anthony Dipaola, Saudis Plan Big Oil Output Hike, Beginning All-Out Price War Bloomberg 03/07/2020):
For over three years, President Vladimir Putin had kept Russia inside the OPEC+ coalition, allying with Saudi Arabia and the other members of the Organization of Petroleum Exporting Countries to curb oil production and support prices. On top of helping Russia’s treasury – energy exports are the largest source of state revenue – the alliance brought foreign policy gains, creating a bond with Saudi Arabia’s new leader, Crown Prince Mohammed bin Salman.
The world’s largest oil exporter engaged in an all-out price war on Saturday by slashing pricing for its crude by the most in more than 30 years. State energy giant Saudi Aramco is offering unprecedented discounts in Asia, Europe and the U.S. to entice refiners to use Saudi crude.Radmilla Suleymanova points out (Russia 'playing with fire' as OPEC+ talks collapse Aljazeera 03/06/2020):
At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record 12 million barrels a day, according to people familiar with the conversations, who asked not to be named to protect commercial relations. With demand ravaged by the coronavirus outbreak, opening the taps would throw the oil market into chaos.
The Kremlin said on Friday that President Vladimir Putin had no plans to talk to the Saudi leadership, dashing hopes that a deal could be salvaged at the very top.Russia's increasing involvement in the Middle East is a double-edged sword. Russia is supporting the Syrian government in its internal civil war and the related conflicts with Turkey, with which Russia had improved relationships in previous years. Russia also is also favoring Syria's ally Iran. Saudi Arabia is involved in a war in Yemen that is partially a "proxy war" with Iran. So is the war in Syria.
"This is an unexpected development that falls far below our worst-case scenario and in our view will create one of the most severe oil price crisis in history," Bjoernar Tonhaugen, head of oil markets at Rystad Energy, told Al Jazeera.
"The decision risks sending oil prices into a free fall with the fundamental floor for prices, as in 2016, determined by the cost of completing US shale DUCs [drilled but uncompleted wells], which is now as low as $25 per barrel."
The conventional American response to increased Russian involvement there as a threat to the US and NATO seems to be pretty one-sided at this point. Involvement in the Middle East, especially since the Iraq War, has not proven to be a positive thing for the United States. A much weaker Russia, also committed to keeping military pressure on Georgia and Ukraine and having annexed the Ukrainian territory of Crimea, is arguably already overextended in its Middle East involvements.
David Hearst describes the rocky state of Russia-Turkey relations in Erdogan and Putin: The end of the affair Middle East Eye 03/03/2020. That article was published before the new cease-fire agreement between the two countries, which so far doesn't seem to be very substnatial, in any case.
So when we talk about Russia interference in European and American politics, it's important to remember to what extent we are talking about a regional-power petrostate that's largely trying to play a weak hand as best it can. Paul Pillar provides a "realist" look at that aspect of Russian policy in Why Putin keeps interfering in U.S. elections Responsible Statecraft 03/6/2020.
When it comes to Russian meddling in US Presidential elections, it's important to recognize that it's a real problem that needs to be countered. But despite Putin's autocratic/oligarchical approach to governance in Russia and the various rightist-nationalist-Christianist ideologies that he has employed over the years to justify it, there's little reason to view Russian goals in that interference as promoting a particular ideology or trying to set up "Manchurian candidates". As Pillar writes, "the advantages in Russian eyes of stoking as much division as possible between the major American political parties is still for Moscow the dominant factor. ...The Russian objective of stoking divisions applies to America’s relations with the rest of the world as well as to divisions within the United States."
But Pillar does speculate that Russia likely views keeping Trump in the Presidency as serving their goal of weakening NATO and other American alliance, because Trump is making such a message of international relations:
Those who have cast doubt on Putin’s desire to help Trump’s election or re-election by citing Trump’s support for beefing up the U.S. military are missing the most relevant points. What another possible U.S. president would do regarding military posture is not necessarily more desirable from Moscow’s point of view than anything Trump has done. In the 2016 election, Hillary Clinton was widely perceived as the more hawkish of the two candidates, while Trump was talking about retrenchment and getting out of overseas wars. Putin hardly seems fazed by any prospect of a Trump-led arms race; the Russian president recently related to an interviewer that Trump had told him that U.S. defense spending is too high and that disarmament is a more worthy objective. [my emphasis]In any case, it's hard enough for American academic and journalistic experts to predict what affects whom and how in political campaigns. There's no particular reason why Russian specialists in American politics would be notably more shrewd in doing so.
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