WASHINGTON (Pakistan Point News / Sputnik - 10th March, 2020) US President Donald Trump may have to strong-arm Saudi leaders to protect US shale producers and America's economy amid plunging oil prices, former UK ambassador to Syria Peter Ford told Sputnik.
Crude prices slumped by over 30 percent on Monday, their biggest fall since the 1991 Gulf War, after the OPEC+ alliance failed to agree on a new production cuts deal last week.
"US shale producers have been getting a free ride... and now it has come to an end," Ford said on Monday. "He [Trump] will have either to... strong arm his Saudi chum [Crown Prince] Mohammed bin Salman or give Russia other incentives, such as sanctions relief, to be more 'cooperative.'"
All of this threatens to up-end Trump's chances of being re-elected on the strength of the US economy, Ford said.
Previously agreed production cuts kept the price high enough for more expensive US shale production to remain economic, Ford said.
However, he added, "Russia had enough" and was not going to let it continue.
"Moscow said production restraints had to come off and would not be intimidated by Saudi threats to compete for market share in a race to the bottom if Russia did not take a bigger share of production cuts [that] OPEC and its partners might agree to keep," Ford said.
Those threats, he added, are now being made real and the markets are reeling.
"Who will now blink first? Maybe no-one will blink until market forces are allowed to stabilize supply in line with shrunken demand," Ford said.
In the race to slash oil prices, Russia might well succeed in undercutting both the United States and Saudi Arabia and riding out the financial shock waves far better than Wall Street or Riyadh, Ford suggested.
"Both the United States and Saudi would do well to remember that you should never play Russian roulette with a Russian. They invented the game," Ford warned.
