Russia managed to withstand battles in the global crude market. Saudi Arabia acted as a major rival in the oil arena throughout the year. The kingdom was setting prices on a large scale in order to hold on to its market share. The Saudis chose the strategy of increased oil production thus crushing contract prices for oil delivery. On the one hand, this kind of policy helped at least to keep the established partners if not attract new ones. On the other hand, dumping oil prices backfired on Saudi Arabia itself, which is used to living grandly at the expense of oil exports.
Saudi authorities had to announce spending cuts and increase domestic fuel prices struggling to get accustomed to cheap oil prices. The government also plans to revise subsidies for energy and other utilities.
Moreover, officials declared a record budget deficit for this year, and GDP is projected to fall by around 20 percent. Therefore, the main goal of dumping policy, that is to maintain the market share, was not achieved. Summing up the year, Russian oil suppliers reported their success in tapping new markets, China in particular. Notably, China is the major crude oil buyer in the world.
Data from China’s General Administration of Customs showed that Saudi oil supplies decreased from 55 million to 20 million tons. At the same time, Russian exports to China surged to 34 million tons. The figures confirm the fact that the Russian Federation and China are strengthening and developing their trade relations as well as mutual cooperation in the field of energy and other economic areas.
