What role did Saudi Arabia and Russia price war play?

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The Saudi Arabia and Russia price war significantly impacted global oil markets, leading to substantial price drops and prompting governmental intervention.

Yesterday, US crude oil prices experienced their largest single-day gain on record, a 25 per cent surge, as they recovered from a sharp decline. Both US crude and the global benchmark Brent had lost half their value in under two weeks, with the most significant drops occurring since March 6, following the breakdown of talks between Opec and its allies, including Russia. This price war, initiated by Saudi Arabia and Russia, has resulted in a worldwide surplus of cheap oil.
Market Volatility and Price Declines

The price war between Saudi Arabia and Russia has had a dramatic effect on oil prices. West Texas Intermediate (WTI) crude, after a nearly 25 per cent drop to an 18-year low, settled up US$4.85, or 24 per cent, at US$25.22. Similarly, Brent crude, which had plunged to its lowest point since 2003 at US$24.52 on Wednesday, settled up US$3.59, or 14.4 per cent, at US$28.47 a barrel. This volatility has led to both benchmarks losing half their value in less than two weeks.
Increased Supply and Price Cuts

Following the collapse of negotiations, Saudi Arabia, the de facto leader of Opec, announced plans to increase its oil supply to a record 12.3 million barrels per day. Concurrently, the kingdom also implemented significant cuts to the official selling price of its oil, by several dollars per barrel, further contributing to the market glut. This aggressive supply increase by Saudi Arabia, coupled with Russia's participation in the price war, has intensified the downward pressure on global oil prices.
US Intervention and Industry Concerns

The ongoing price war has raised serious concerns within the United States, particularly for its shale oil and gas industry, with many companies facing the risk of bankruptcy. In response, US senators have engaged with Saudi Arabia's envoy in Washington, urging both Saudi Arabia and Russia to cease their price war. While acknowledging that low gasoline prices benefit US consumers, President Donald Trump indicated that he would intervene in the dispute between the two oil-producing nations "at the appropriate time."

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What role did Saudi Arabia and Russia price war play?

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