The COVID-19 pandemic slowed global economic activity and oil demand. In early March, the Saudis tried to convince other oil producers to cut production, OPEC members and non-members alike. After Russia refused to go along, Saudi Arabia opened production, pressuring producers worldwide. The US president “initially greeted the price collapse as a ‘big tax cut,’ but by the end of March he changed his tune under pressure from the domestic oil sector,” explains Thomas Graham, distinguished fellow at the Council on Foreign Relations. “He set about trying to persuade the two strongmen he had cultivated since assuming office, Saudi Crown Prince Mohammed bin Salman and Putin, to agree to major production cuts.” Putin cannot risk low oil prices or domestic unrest, and managed to control the narrative: standing up to Saudi demands, refusing to let Russia bear the brunt of production cuts; forcing Trump to intervene, and then announcing total cuts. As a humanitarian gesture, he also sent a planeload of protective medical gear to the United States. The production cuts may not be enough, yet as Graham concludes, all that matters for Russia is Putin’s appearance as a decisive leader in charge. – YaleGlobal
