Russia pushed Saudi Arabia to the number three position in oil production

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New Delhi: After America (US), Russia has also given a big blow to Saudi Arabia (UAE) in the matter of oil production. The price war started between Russia and Saudi Arabia over crude oil prices in March 2020 amid the Corona crisis. On one hand, Saudi Arabia wanted Russia to reduce oil production so that the falling oil price in the international market could be stopped. At the same time, Russia was not ready to reduce production. Angry, Saudi Arabia had decided to increase production and give prices a discount. Saudi Arabian government oil company Aramco said that 120 million barrels of oil will be produced every day.

Russia is not an OPEC member, refused to reduce production
Saudi Arabia dominates the Organization of Petroleum Exporting Countries (OPEC). In March, Saudi Arabia proposed to cut oil production through OPEC in view of the huge reduction in oil demand due to Coronavirus Pandemic. Russia is not a member of OPEC. He refused the proposal to reduce production. After this, there was a war on oil prices in both countries. Let us tell that America had become the world’s largest oil-producing country leaving Saudi Arabia behind in 2018 itself.

Saudi Arabian economy is affected by oil market
During the global pandemic, there was a huge reduction in Crude Oil Demand when the business activity stopped due to lockdown. In view of this decline, Saudi Arabia and Russia had to agree to cut oil production in OPEC and OPEC Plus. The US also had to cut production by 2 million barrels per day. However, the US and Russia do not make much difference due to reduced oil production or exports. At the same time, the condition of Saudi Arabia starts deteriorating as soon as the oil market is affected due to the oil based economy.

Saudi Arabia’s oil exports are also coming down
According to the Joint Organization Data Initiative (JODI), Russia has pushed Saudi Arabia to number three in terms of oil production in the month of June. During this period, Russia’s oil production stood at 87.88 lakh barrels per day, while that of Saudi Arabia was 7.5 million barrels. In June also, the US topped the terms of oil production. During this period, oil production in the US was 108.79 barrels per day. Saudi Arabia’s oil exports are also steadily declining. In June 2020, Saudi oil exports fell below 5 million barrels per day. Saudi oil exports stood at 4.98 million barrels per day in June. Its oil exports declined by 17.3 percent in June as compared to May.

America has the world’s largest oil reserves
A report released in 2016 by Ristad Energy stated that the US has 264 billion barrels of oil reserves. It also includes the existing oil reserves, new projects, recently discovered oil deposits and oil wells discovered. The report states that the US has more oil reserves than Russia and Saudi Arabia. According to Ristad Energy estimates, oil has 256 billion barrels in Russia, 212 billion barrels in Saudi, 167 billion barrels in Canada, 143 in Iran, and 120 billion barrels in Brazil.

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