Saudi Arabia has upper hand in oil price war against Russians: Expert tells CNBC

This picture taken on December 11, 2019, shows a view of a refinery at the Jubail Industrial City, about 95 kilometres north of Dammam in Saudi Arabia's eastern province overlooking the Gulf. (File photo: AFP)

Saudi Arabia has the upper hand in their ongoing price war with Russia, said Again Capital Founding Partner John Kilduff in an interview with CNBC. “[Saudi Arabia] are sticking to their guns,” he said, as oil prices jumped by around 8 percent on Tuesday.

“They did everything they could over the weekend to do an achieve the objectives that we're seeing right now, which is this plummet in price. Not only did they say they're going to unleash more production next month, go over 10 million barrels a day,” Kilduff said during CNBC’s “Squawk Box” program.

“They are sticking to their guns. I'll tell you that whatever happened at that meeting was more than just the polite business disagreement. It was a falling out between those two, Russians on the wire saying that they could withstand this price environment for six to 10 years,” he added.

Read more: OPEC and Russia ‘jump off the cliff together’ as coronavirus hits oil demand

Oil prices suffered a dramatic collapse in early trading on Monday after talks between OPEC members and Russia fell apart, leading to the opening salvo in a price war that could see oil prices decline further. OPEC and Russia had been meeting to increase an existing oil supply cut agreement by another 1.5 million barrels per day due to the impact that the coronavirus has had on demand.

A day later, oil prices jumped by around 8 percent a day after the biggest rout in nearly 30 years as investors eyed the possibility of economic stimulus and Russia signaled that talks with OPEC remained possible.

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Last Update: 14:43 KSA 17:43 - GMT 14:43
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