"Russia-Saudi Conflict Sparks Reactions from Oil-Exporting Countries... COVID-19 Risk Increases"

[Asia Economy Reporter Naju-seok] Concerns have been raised that Russia and Saudi Arabia engaging in an 'oil war' by announcing production increase plans could hinder efforts to contain the spread of the novel coronavirus infection (COVID-19). For countries barely sustaining their finances through crude oil exports, this could result in losing the financial capacity to cope with COVID-19 and other challenges.

Fatih Birol, Executive Director of the International Energy Agency (IEA), criticized Russia and Saudi Arabia for waging an oil war as "irresponsible."

In an interview with a media outlet, Executive Director Birol said, "The world is fighting COVID-19, yet now a price war has erupted," adding, "No matter how you look at it, this can only be seen as irresponsible." He warned, "The people of the world will not forget who took which side in this fight against COVID-19 and who made this battle more difficult."

Executive Director Birol stated, "Countries like Algeria, Iraq, and Nigeria are facing massive budget deficits as oil prices fell by 25% this week," and added, "In such cases, they will find it difficult to respond adequately to the COVID-19 threat."

[Image source=Reuters Yonhap News]

The Organization of the Petroleum Exporting Countries (OPEC), including Saudi Arabia, discussed production cuts in response to decreased demand due to COVID-19 but failed to reach an agreement due to Russia's opposition. Subsequently, Saudi Arabia announced a policy to increase crude oil production drastically. Amin Nasser, CEO of Saudi state oil company Aramco, stated, "We will raise daily crude oil production to 12.3 million barrels next month." This signaled a firm stance to fully respond to the price war that began after the production cut agreement. Russia also expressed its position to increase production, leaving international oil prices at about half of the level at the beginning of the year.

This content was produced with the assistance of AI translation services.