Crude Oil price war between KSA & Russia is good for India as it reduces the Oil Price Inflation reducing the substantial risk of Stagflation. Wid High Inflation with low growth & demand in Economy couldn’t have ask for more. A cool off in inflation cud mean more rate cuts by RBI
While the American shale will be hurt as well as low oil prices make it the market uncompetitive for them. However, America is already using Trade tactics to force coutries to buy American Shale/LNG to reduce Trade Deficit. Thus Saudi Arabia will be the biggest looser in this war
Iran will also be the biggest sufferer as it already faces sanctions & now oil price shock would kill whatever remains of its economy. Saudis have essentially to destroy Iran & Russian backing of it have sought to hit themselves with sledge hammer.
Oil demand was already facing cooling period due disruptions of #Coronavirus leading to less supply, disruption of Maritime traffic. Americans have their own crude oil now so Saudi dependence is substantially made redundant in maintaining the Petro Dollar circuit.
This is not Russia’s war on Petro Dollar rather KSA by cutting Oil Production and boosting the rates would have inched inflation higher potentially threatning the Trump Campaign for Polls 2020 as higher inflation would have meant a no rate cut or QE by Federal Reserve.
And the world economy and more so the American Economy needs emergency rate cuts for QEs by Central Banks to push more liquidity in market in order to soften the effect of disruption caused by #Coronavirus in global supply chains. For Trump it is sine qua non to win elections.
Russia essentially helping Trump & in turn saving the Global Economy from tip towards a recession with high inflation, disruption of supply & demand cycle both. This price war between KSA & Russia is welcome news for Global Economy already seeing the worst disruptions in years.
Trump & Modi are really lucky just when u think #Coronavirus could make life difficult for respective Economies. Putin comes to rescue both 😈😂
Oil Price has multiple benefits on Indian economy. Saves billions of dollars in import bill, reduces inflations, make RBI cut rates that injecting more liquidity in Economy, gives more windfall collection to government from excise & cesses on Oil/Gas thus more public spending.
And finally some proportion of the rate cuts would also be passed on to the consumers. Its basically a Bonanza for Indian Economy a much needed booster shot if leveraged properly.
Also to add this Crude Price crash potentially kills the ARAMCO IPO as well in near future. Making things worse for Saudi Arabia !
