“From Saudi Arabia to Russia”

Russia and Saudi Arabia are fighting an invisible war to claim the leadership in the international oil market. Russia is seeking to replace the world’s largest petroleum exporter, Saudi Arabia, through new oil developments and business rationalization in the past few years.

Former U.S. Deputy Assistant Secretary of State for International Energy Policy, Edward L. Morse, insisted in his article of the latest issue (March and April) of an international affairs magazine, `Foreign Affairs`, that such silent war between the two `oil giants` will bring huge change not only to the world’s economic and energy policies, but also to the dynamic relations of international politics.

Considering itself as the leader of Organization of Petroleum Exporting Countries (OPEC) and the Middle East, Saudi Arabia takes up 25 Per Cent of the world’s oil production by producing 7.5 million barrels of oil per day. Along with additional 3 million barrels allowance, Saudi Arabia has been absolutely influential in price decision of the international petroleum market. However, it has been maintaining the same production amount for the past 20 years, due to the lack of investments for new facilities and new technology.

On the other hand, Russia has been continuously increasing the oil production. It is now producing 2 million more barrels than the mid-1990s. Russia had been striving for re-structuring, oil production and establishment of carriage infrastructure, foreign technology and induction of funds since the economic crisis in 1998. It is quickly regaining the glory of the Soviet Union, which was the world’s largest oil production country.

Russia is expected to produce additional 2 million barrels per day until 2006, as it developed a new old field of 50 billion barrel- oil stock. It will, then, be on the same level as Saudi Arabia’s oil production.

OPEC, led by Saudi Arabia, and Russia went through a confrontation last year regarding oil reduction scale. Saudi Arabia tried to persuade other nations for price-rise, but Russian exceptionally stood against it.

Analysts say that such confrontation is built upon complex mixture of Russia’s confidence and middle-east Asia’s view that their portions are unfairly taken away by Russia’s increased production.

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