Putin miscalculates in crude oil geopolitics

A full scale oil price war amid an epic demand shock is catastrophic for the economies of OPEC, Russia and US shale drillers. Russia hugely miscalculated by rejecting Prince Abdelaziz’s call for an early February emergency meeting and later the 1.5MBD output cut offer at Vienna.

23 OPEC+ countries agreed to the Saudi offer – except Russia. Russia’s share was a mere 300,000 barrel a day cut yet the Kremlin said “nyet”! Like his invasions of Georgia and Ukraine, his military intervention to save the Baathist regime in Damascus, Putin has won the battle but will ultimately lose the long term war. Too bad Putin play judo, not chess as Russia gets checkmated in the cold calculus of crude oil geopolitics.

Matein Khalid is the CIO of Asas Capital Management