Russia benefits from standing its ground in oil price grey zone

Saudi sacrifice shows greater appetite for compromise in a price environment that is not win-win for the two Opec+ heavyweights

Saudi Arabia’s decision to sacrifice 1mn bl/d of production share in February and March demonstrated how far further than Moscow the kingdom appears willing to go to keep Opec+ alive. Russia, meanwhile, was appeased by the agreement that it could increase its oil flow by 130,000bl/d over the next two months. It is no secret that keeping the Opec+ alliance together is a greater priority for Riyadh than it is for Moscow. Saudi Arabia may boast the lowest oil production costs in the world. But it needs a much higher oil price to balance its books, with the IMF estimating the country’s fiscal breakeven oil price for 2021 at nearly $68/bl. Russia, which has a more diversified economy, is going in