Putin targets American frackers for market share; pump prices tumble
“Let’s see how American shale exploration feels under these conditions.” — said Mikhail Leontiev, spokesperson for the Russian government-owned oil company Rosneft, at the breakup of oil production and price cooperation between OPEC and Russia as reported in Bloomberg.
Recessions are among the best times for the most powerful producers to aggressively gain market share by driving strained competitors out of business as demand drops. The question is which producer can endure the most pain the longest. The disadvantage is to the Americans. That is because shale oil production, prevalent in the U.S., is more expensive to produce than traditional oil drilling that Russia uses.
For American consumers. the upside of Russia’s maneuvering for market share is that during this challenging time gas purchasers will be relieved as pump prices tumble to incredible lows -- not that Americans will be doing a lot of road travel. But the downside is that employee layoffs will hit as the shale oil energy sector is hollowed out.