- The fallout between Saudi Arabia and Russia has led to a slump in oil prices
- Oil prices on Monday, March 9, crashed to $31 a barrel
- Saudi Arabia has also launched a price war against Russia
The collapse of a long-time alliance between two of the world's oil-rich nations, Saudi Arabia and Russia has lead to a crash in oil prices. Since 2016, both countries have worked together to control output and support prices.
Following the widespread of the deadly coronavirus, the partnership between Saudi Arabia and Russia appeared to be more important than ever to all producers as the demand for oil has been plunging.
In a report by The Economist, members of the Organisation of the Petroleum Exporting Countries (OPEC) were eager to make a deal with allied oil producers, led by Russia and Saudi Arabia as the undeclared leader.
However, on Friday, March 6, the meeting ended without any agreement made. To everyone's surprise, Saudi Arabia shocked the market by launching a price war against its onetime ally and America.
Russia refused a slash production which is what the Saudis wanted, nonetheless, the development prompted the Islamic country to cut prices.
Saudi Arabia then announced increase production from next month and also threatened other higher-cost producers.
As at Friday, March 6, the price of Brent crude, the global benchmark, fell from about $50 to $45 and on Monday, March 9, it crashed further to $31 a barrel.
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Legit.ng previously reported that oil prices have fallen as concerns about the global spread of the coronavirus causes anxiety among investors. Oil prices fell over 2% on Monday, February 24 as the spread of the virus left investors worried about a potential fall in demand.
With new cases recorded in Iran, Italy and South Korea, Brent crude reportedly fell by $1.42, or 2.4%, to $57.08 a barrel by 0552 GMT; U.S. crude also fell by $1.26, or 2.4%, to $52.12.
Sylva made the disclosure at a news conference to end the 2020 Nigeria International Petroleum Summit (NIPS) in Abuja.
He said: “The figure we are getting, the jury is not totally out yet but from the evaluation results we are getting the reserve that has been discovered in the northeast is about a billion barrels."
Similarly, the Attorney-General of the Federation (AGF), Abubakar Malami (SAN), said Nigeria is determined to recover over $62billion from multi-national oil companies for under-payment to the country since 1998.
Under the country’s joint operating agreement, Nigeria is authorised to review the existing profit-sharing formula with its partners once crude oil prices at the international oil market rise above $20 per barrel.
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