In March 2020, there was a dispute over the price of oil in Saudi Arabia and Russia. Saudi Arabia wanted Russia to reduce oil production so that falling international oil prices could be handled. But Russia was not willing to reduce production.

Saudi Arabia also decided to sell production by increasing production and discounting the price of oil, after being irritated by this attitude of Russia. Saudi Arabia took this decision when all the businesses in the world were stalled due to the Kovid 19 epidemic. Both countries were blaming each other for the fall in prices. Russia's state television was blaming Saudi Arabia for the fall in its currency ruble.

On the other hand, Saudi Arabia had also decided to reverse. On April 1, Saudi national oil company Aramco said that it would produce 12 million barrels of oil every day.

This was 26% more production than the agreement with Russia. Saudi Arabia felt that it would prove itself a king in the price war with Russia.

There have been two important changes in the world of oil in the last three years and their impact has been very wide.

The first is that the production of oil in America has increased. This production has increased so much that the United States has become a major oil exporting country from a major oil importer.

The second is the cooperation between Russia and Saudi Arabia to keep oil prices stable. The United States, Russia and Saudi Arabia are the three largest oil producing countries in the world. America is at number one and the rivalry between Russia and Saudi continues at number two. Cooperation between Russia and Saudi Arabia has been badly affected in recent times.

The Organization of the Petroleum Exporting Countries, OPEC has the highest dominance of Saudi. In March, Saudi Arabia proposed to cut oil production through OPEC due to the huge reduction in oil demand due to Kovid 19.

Russia is not a member of OPEC and refused to go along with the Saudi proposal. After this, a price war on oil was sparked in both countries.

US shale oil is a challenge for both Saudi and Russia. However, the production of shale oil is expensive. But due to the production of shale oil, America became the largest oil producing country from the world's largest oil importer.

Due to the expensive production of shale oil and gas, Russia feels that it cannot challenge its market. Compared to traditional crude oil (which is in Russia and Saudi Arabia), shale oil is extracted from the layers of rocks.

Conventional crude oil escapes to a depth of 6000 feet while shale oil production is complex. In 2018, the US became the world's largest oil producer, surpassing Saudi Arabia. This rise of the US also affected the oil market of Saudi and Russia.

When the epidemic of Kovid 19 came, there was a huge decline in the demands of oil. Given this decline, Saudi Arabia and Russia had to agree to drastic cuts in oil production in OPEC and OPEC Plus. America also had to cut its production by 2 million barrels per day. Although the US and Russia's oil production or export is less, it does not matter as much as Saudi Arabia. Saudi Arabia's economy is dependent on oil and as soon as the oil market is affected, its kingship shakes and fears about the future.

Saudi's oil production and exports are facing a tough challenge from Russia along with the US. First, the US pushed Saudi to number two in terms of oil production and now Russia has brought Saudi to number three. According to the Joint Organization Data Initiative (JODI), Russia has ranked Saudi Arabia at number three in terms of oil production in the month of June.

With this, Russia has become the second largest country in the world in terms of oil production after USA. According to JODI, Russia's oil production stood at 8.788 million barrels per day in June, while Saudi Arabia's was just 7.5 million barrels.

In June, the US topped the terms of oil production. According to JODI, oil production in the US stood at 10.879 million barrels per day in June. Saudi Arabia's oil exports have also been steadily declining. Saudi oil exports fell below 5 million barrels per day in June. According to JODI, its oil exports declined by 17.3% in June as compared to May.

Saudi oil exports in June stood at 4.98 million barrels per day. Saudi oil production was 6.02 barrels per day in May and 10 million barrels in April.

The challenge for Saudi Arabia is now as big as how to reduce the dependence of its economy on oil?

The ambition of the Crown Prince of Saudi Arabia is to make Saudi stand on the earnings of oil, but nothing like this has happened yet.

Energy expert at the Rice University Baker Institute, Jim Kraen, told the news agency Reuters last year, "Saudi Arabia has an addiction to oil and is still not weak." The Saudi economy is running on oil. GDP rests on oil business.

Arab leaders know that high oil prices are not forever. Four years ago, keeping this in mind, Saudi Arabia's Crown Prince Mohammed bin Salman introduced 'Vision 2030'.

The goal of this vision was to reduce Saudi economy's dependence on oil. The rest of Saudi's neighbors also know how dangerous it can be to depend on oil. Middle East and North Africa oil revenues have been steadily declining.

According to the International Monetary Fund, in 2012 revenue from oil in these areas was one trillion dollars, which increased to 575 billion dollars in 2019.

This year, Arab countries are estimated to get $ 300 billion from the sale of oil, but it will not be able to meet their expenses. Since the month of March, they have been cutting production, raising taxes and taking loans. Many countries are struggling with the problem of cash.

The future of Saudi does not assure much. There is talk of alternative energy all over the world and its scope is also expanding. In such a situation, the crisis that is dependent on the economies of oil is going to increase. The corona virus epidemic has brought the hollowness of these economies to the surface.

A report by Ristad Energy came out in 2016, stating that the US has 264 billion barrels of oil reserves.

This includes the existing oil reserves, new projects, recently discovered oil deposits and the oil wells that are yet to be discovered.

This report states that the United States has more oil reserves than Russia and Saudi Arabia.

According to Ristad Energy estimates, there are 256 billion barrels of oil in Russia, 212 billion barrels in Saudi, 167 billion barrels in Canada, 143 billion barrels in Iran and 120 billion barrels of oil in Brazil.

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