I thought I read last week the Russia's generally play hard ball but then get inline with OPEC. Plus they can't afford low oil prices either to their economy
I think Putin saw an opening. What you described is what I expected but instead the Russians blew it up. The US shake industry was finally showing capital restraint, signaling that the OPEC strategy might work. But when COVID-19 came and global oil demand growth expectations were brought all the way down from 1.2 MMbpd year over year to something more like a small drop or rise year over year (200 kbpd or so), the Russians saw an opportunity. Rather than chase it with another 1.5 MMbpd cut they blew the deal up. Saudi told member states to pump at will and then Saudi started slashing prices.
He usually welcomes a low oil price but he’s getting ready to find out that isn’t as good as it used to be. The sectors of the economy that enjoy a low oil price are very hampered by COVID-19. We’ll see what it means for the US economy. I think I tend to overweight it’s impact.
Destabilize the Middle East and mess with the US. They can ramp their production a quite a bit to help. And they have a floating exchange rate and no USD denominated debt which also helps. They’ll try to make Saudi sweat and break the US shale industry. But they can definitely lose. It’s a massive oil war. I suppose they could blink tomorrow but it’s not looking like it.
if this were poker, I think they're going all-in. timing it with the global slowdown is a way to let the worse case coronavirus scenarios work in their favor.