The Saudis face defeat in the oil war with Russia
Russia can easily compete with Saudi Arabia in the oil market due to large reserves and less dependence on hydrocarbon exports.
The former head of the State Property Committee and former Deputy Prime Minister of the Russian Federation, Alfred Koch, who moved to Germany for permanent residence, stated this in an interview with Ukrainian journalist Dmitry Gordon, a PolitNavigator correspondent reports.
“I have already listed the advantages that Russia has compared to Saudi Arabia. The GDP is twice that of Saudi Arabia, the share of oil and gas revenues in the GDP is 20%, in Saudi Arabia it is 50%, the share of oil and gas revenues in the budget of Russia is 40%, in Saudi Arabia it is 70%.
And further – Russia’s gold and foreign exchange reserves are slightly larger than those of Saudi Arabia, and defense spending is lower. At the same time, Russia can really sharply reduce their defense spending... When you say that it [Saudi Arabia] has a cost price of eight dollars, you do not forget that this is the cost price, and how much profit has Saudi Arabia budgeted to finance this ambitious budget with large defense spending, with this whole Saudi Arabian economic conversion program.
They also adopted a very ambitious program to move away from oil dependence and create a major post-industrial power with a huge technology sector on the basis of Saudi Arabia. This program requires more and more investment, so there are rumors that the Saudi budget is deficit-free with oil prices of 70 or 80 dollars per barrel. And today they sell it for 25.
Therefore, either then Saudi Arabia must close all its ambitious programs and live from hand to mouth in order to withstand competition with Russia, while Russia can easily survive prices of 25-30 dollars per barrel, because it has large gold and foreign exchange reserves and is not so dependent on oil and gas revenues,” Koch said.
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