How Americans Are Actually Winning the Great Russian Oil War

Russian President Vladimir Putin may want to rethink his global strategies because everyday Americans are winning big as the fallout of his oil war with Saudi Arabia ramps up.

Expectations are that the average national price at the pump will drop below $2 very soon. Already, prices in some parts of Oklahoma dipped to $1.24, and one station in Kentucky made headlines for selling out at $0.99 per gallon.

“99 CENT UPDATE: The BP station selling at 99c is known for bunker busting prices, but sadly, the station is now SOLD OUT of regular and waiting for another delivery,” Gas Buddy analyst Patrick De Haan tweeted. “The number of stations selling gasoline under $2/gal has risen to nearly 40,000, up from 15,000 a week ago, while retail prices have collapsed to as low as $1.24/gallon in Oklahoma City last week, with more price drops coming for nearly every station in the week ahead as they continue to pass along the lower replacement cost.”

If Russia truly had U.S. Oil in its targets, as some left-leaning media outlets suggested, Putin struck out with his geopolitical strategy. According to AAA, states below the $2 threshold included Alabama, Arkansas, Georgia, Iowa, Indiana, Kansas, Kentucky, Louisiana, Missouri, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and Wisconsin, in late March. Interestingly, President Donald Trump carried every one of those states, with the exception of Virginia. Perhaps liberal extremists can start a new hoax that the Russians are meddling in gas prices on Trump’s behalf.

In reality, the great Russia-Saudi Arabia oil flap has very little to do with America or our politics. At issue is the fact that the number 2 and 3 oil producers, respectively, have vastly different ideas about profitability. Russia would prefer to ramp up production because its threshold to turn a profit remains less than half of the Saudis’. Russian oil outfits grew increasingly tired of international deals to tamp down production. After President Trump unleashed U.S. Oil through deregulation, it appears Putin may be just clearing the oil board by bankrupting Saudi Arabia’s government-owned corporations.

“In purely basic oil economics terms, Russia has a budget breakeven price of US$40 per barrel of Brent this year: Saudi’s is US$84. Russia can produce over 11 million barrels per day (mbpd) of oil without figuratively breaking sweat; Saudi’s average from 1973 to right now is just over 8 mbpd,” Sam Watkins posted at Oil Price. “In practical terms, this means that if, in fact, it takes longer than originally thought by Russia for Saudi to go bankrupt and it starts to have any negative impact on Russia, then Moscow will just click its fingers together and Riyadh will come running to sign a new OPEC+ output cap deal.”

Despite the underlying facts about why Americans are filling up for less, fake news outlets continue to try to mislead. Notoriously anti-Trump National Public Radio (NPR) stated that cheap gas is “driven by the coronavirus pandemic” as well as the Russian oil war. NPR goes on to stoke fears that gas prices could hit $0.50, but Americans might not have enough money to fill up due to the COVID-19 pandemic.

The Russians have, inadvertently, done Americans a solid on this one. Gas is cheap, and the president just ordered the national reserves replenished at a discount. For those who grew accustomed to the previous administration, this is called: “Winning!”

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One response to “How Americans Are Actually Winning the Great Russian Oil War”

  1. It appears that Russia is playing Russian Roulette with their own oil market. I suppose they think that pushing down the price of oil on the global market will hurt American producers that rely on expensive fracking to extract oil. But in doing so, Russia has also tanked the revenue for their oil. So I guess they are willing to play a game of chicken to see who can withstand the loss the longest.

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