Oil production: Is Russia's dominance over Saudi Arabia exacerbating the Arab crisis?

 In March this year, Saudi Arabia and Russia clashed over oil prices. Saudi Arabia wanted Russia to reduce oil production in order to cope with falling oil prices, but Russia refused to reduce production. Fed up with Russia's behavior, Saudi Arabia also decided to increase production and sell by lowering oil prices. Saudi Arabia made the decision at a time when all of the world's businesses were at a standstill due to the Code 19 epidemic. The two countries were blaming each other for the devaluation and Russian state television was blaming Saudi Arabia for devaluing its currency, the ruble. On the other hand, Saudi Arabia had also decided to strike back. On April 1, Saudi Arabia's national oil company Aramco said it would produce 13 million barrels a day. That was 26 percent more than the deal with Russia. Saudi Arabia thought it would prove itself king in a price war with Russia. But before that, look at the two major changes in the oil world over the past three years that have had a far-reaching impact. The first is that oil production in the United States has increased. This production has increased so much that the United States has gone from being a major oil importer to an oil exporter. Second, cooperation between Russia and Saudi Arabia is essential to keep oil prices stable. The United States, Russia, and Saudi Arabia are the three largest oil producers in the world. The United States tops the list, with Russia and Saudi Arabia competing, and cooperation between the two countries has been severely hampered in recent days. The Organization of the Petroleum Exporting Countries (OPEC) has been dominated by Saudi Arabia. In March, Saudi Arabia proposed a reduction in oil production through OPEC due to a sharp drop in oil demand due to Code 19. Russia is not a member of OPEC and has refused to accept the Saudi proposal. This was followed by competition between the two countries over oil prices. Russia is not a member of OPEC and has refused to accept the Saudi proposal. Then came the competition between the two countries over oil prices. US shale oil is a challenge for both Saudi Arabia and Russia. Although the production of shale oil is expensive, it is because of shale oil that the United States has become the world's largest oil exporter and largest oil exporter. Due to the high cost of shale oil and gas production, Russia believes that no one can challenge its market. Compared to conventional crude oil (which is in Russia and Saudi Arabia), shale oil is extracted from rock layers. Conventional crude oil is extracted from a depth of 6,000 feet, while shale oil production is complex. In 2018, the United States surpassed Saudi Arabia to become the world's largest oil producer. The rise of the United States has also affected the oil markets of Saudi Arabia and Russia. Oil demand fell sharply when the Code 19 outbreak struck. In view of this reduction, Saudi Arabia and Russia had to agree on a sharp reduction in oil production in OPEC and OPEC Plus. The United States also had to reduce its production by 2 million barrels per day. However, US and Russian oil production or exports are low, so they don't care as much as Saudi Arabia. Saudi Arabia's economy is dependent on oil, and as soon as the oil market is affected, its monarchy is shaken and concerns about the future begin to arise.

Saudi Arabia's oil production and exports are severely challenged by the United States as well as Russia. First, the United States pushed Saudi Arabia to second place in terms of oil production, and now Russia has pushed Saudi Arabia to third place. According to the Joint Organization Data Initiative (JODI), Russia ranked Saudi Arabia third in terms of oil production in June. At the same time, Russia has become the world's second-largest oil producer after the United States. According to the JODI, Russia's oil production in June was about 8.7 million barrels per day, while Saudi Arabia's production was only 7.5 million barrels. In June, the United States topped the list of oil producers. According to JODI, daily oil production in the United States in June was 18 million barrels. Meanwhile, Saudi Arabia's oil exports have been steadily declining. Saudi oil exports fell below 5 million barrels a day in June. According to JODI, its oil exports in June fell by 17.2% compared to May. In June, Saudi Arabia's daily oil exports exceeded 4.9 million barrels. Saudi oil production was 6 million barrels per day in May and 10 million barrels in April. Now the challenge for Saudi Arabia is how to reduce its economy's dependence on oil. Saudi Arabia's Crown Prince Mohammed bin Salman wants to keep Saudi Arabia's economy afloat without oil, but this does not seem to be possible. Jim Crane, an energy expert at the Rice University Baker Institute, told Reuters last year: "Saudi Arabia is addicted to oil and its habit has not weakened. Saudi Arabia's economy is dependent on oil. GDP is based on the oil business. ”Arab leaders know that oil prices will not always be the same. In view of this, four years ago, the Crown Prince of Saudi Arabia introduced 'Vision 2030'. The vision was to reduce the Saudi economy's dependence on oil. Saudi Arabia's other neighbors also know how dangerous it can be to depend on oil. Oil revenues in the Middle East and North Africa have also been steadily declining. According to the International Monetary Fund, oil revenues in these areas were ایک 1 trillion in 2012, which fell to 57 575 billion in 2019. This year, Arab countries earned 300 300 billion from oil sales, but that amount will not cover their expenses. Since March, they have been cutting production, raising taxes, and borrowing. AK Pasha, a professor of Middle East studies at Delhi's Jawaharlal Nehru University, says the future of Saudi Arabia does not look bright. He says there is talk of alternative energy all over the world and its scope is expanding. In such a situation, the crisis of oil-dependent economies is growing. The Coronavirus epidemic has exposed the hollowness of these economies. According to a 2016 report by Rastad Energy, the United States has 264 billion barrels of oil reserves. This includes existing oil reserves, new projects, recently discovered oil reserves and oil wells that are not yet known. The report said the United States had more oil reserves than Russia and Saudi Arabia. According to Estad Energy, Russia has 256 billion barrels of oil, while Saudi Arabia has 212 billion barrels, Canada 167 billion barrels, Iran 143 billion barrels, and Brazil 120 billion barrels.