In Russia’s oil market share war with Saudi Arabia, the ruble gave an advantage to the Russians with a sharp decline, costs fell, now they can produce cheaper than the Saudis.
The Russian currency lost about a fifth of its value against the US dollar – the oil currency – after talks collapse on March 6.
Whereas, Saudi Arabia’s riyal was fixed at $ 3.75 rial level.
According to the financial reports of the two producers, the cost of Russian producers was 199 rubles or $ 3.10 per barrel last year, while the Saudis were $ 10.6 rial or $ 2.80.
According to current calculations, the cost of Russians fell below the Saudis and $ 2.50 compared to the current ruble rate against the dollar.
Saudi Arabia has announced that starting from April it will provide 12.3 million barrels (bpd) of record oil per day for the next few months for internal usage and in exports.
The production of Russia is currently 11.30 million bpd. Officials said Russia could add 500,000 bpd in a few months.
The Russians say that the wrong handling of production cuts is beneficial for the USA, and that US producers are increasing the supply at high prices and destroying Russia’s oil industry.
As a result, both sides aim to increase oil outputs in order to get the market shares that have been lost by the US and other producers.