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Kremlin Stresses Strong Relations With Saudi Arabia, no Oil Price War

Kremlin Stresses Strong Relations With Saudi Arabia, no Oil Price War

Saturday, 21 March, 2020 - 11:15
A woman holds new 200 and 2,000 rouble banknotes in a bank in Moscow, Russia November 21, 2017. REUTERS/Maxim Shemetov
Moscow- Taha Abdulwahed

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.

Russia’s Central Bank held its benchmark rate at 6 percent. “In February-March, the situation has been developing with a significant deviation from the Bank of Russia’s forecast under the baseline scenario. This is related to worsening global growth prospects amid the spreading coronavirus as well as to a rapid deterioration of dynamics in global commodity and financial markets,” the Central Bank said in a statement.

Fitch Ratings on Thursday lowered its forecast for Russia’s 2020 gross domestic product (GDP) growth to 1 percent from 2 percent in December, citing a global economic slump, the collapse in oil prices and a weaker rouble. It said subdued external demand and the weaker rouble had reduced investment.

Peskov also commented on US President Donald Trump statements on his intention to discuss at the right time the debate between Russia and Saudi Arabia. He said the two nations still enjoy "good relations, a partnership."

Responding to Fedun’s estimations that the drop of oil prices to less than USD25 per barrel would be catastrophic for the Russian economy, Peskov said "Certainly, the price situation is unpleasant... But we can't agree that this is a disaster for Russia in the medium term because our government has a solid safety cushion which for several years could provide an opportunity to fulfill all social obligations, development plans, and so on."

He added: "You know that the Russian budget is calculated at USD42 per barrel. Of course, this price is unfavorable for us, but we have a safety cushion, which we'll use when it is necessary. Both in the short and medium term nothing bad is going to happen."

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