Kremlin Says No One Should Intervene in Russia-Saudi Oil War After Trump Hints at Action

The Kremlin's spokesperson has suggested that no one should interfere in Russia and Saudi Arabia relations as an oil price dispute continues roiling global markets. Dmitry Peskov told reporters Friday that relations between Moscow and Riyadh remain strong despite the disagreement, which he claimed was not a price war.

"There are no price wars between Russia and Saudi Arabia," Peskov said, according to Russian state news agency Tass. "There is a very unfavorable pricing environment for many countries," he added. Peskov said the two nations still enjoy "good relations, a partnership."

The price of oil spiraled earlier this month when the two countries split over proposed caps on production. Battling oversupply and demand slowdown due to the coronavirus, the Saudi-dominated OPEC cartel ordered a reduction in production to buoy prices.

But Russia — which for three years had been cooperating with OPEC under the OPEC-Plus agreement — refused to fall in line, perhaps seeking to grab a larger market share for itself.

In retaliation, the Saudis upped production and flooded the market, forcing the price of oil down for all producers.

American producers have also been suffering. In recent years, the U.S. has become self-sufficient in oil and the world's largest producer thanks to the proliferation of shale production.

But many producers are heavily in debt, and a long slow down in price could force them out of business.

On Thursday, President Donald Trump said he would intervene in the price war at "the appropriate time." The Wall Street Journal reported that the administration — under pressure from American firms — was considering diplomatic outreach to the Saudis and fresh sanctions on Russia to end the price war.

But Peskov said Friday, "We do not think that anyone should intervene in these relations."

Trump also suggested that the current situation is "very devastating to Russia because when you look, their whole economy is based on that."

Peskov disagreed though admitted the situation is "fairly unpleasant." He added, "When saying that this is a catastrophe for Russia, there is probably no way of agreeing with this in midterm, since as our president and our government reiterated that we have a solid safety margin for several years, which will support fulfilling all social commitments, development plans, and so on."

Meanwhile, lobbyists for American producers have been attending meetings at the White House and the Treasury and Commerce departments to ask for assistance, the Journal reported. Among the requests are diplomatic intervention and purchases for America's Strategic Petroleum Reserve, according to multiple people who the Journal said are familiar with the meetings.

Dmitry Peskov, Russia, Saudi Arabia, oil, Trump
Kremlin spokesman Dmitry Peskov is pictured during a visit to an amusement park in Moscow, Russia on February 27, 2020. SHAMIL ZHUMATOV/POOL/AFP via Getty Images/Getty