Russia’s hand: weaker than it seems

The devaluation of the rouble has been seen as insulating Russia during any sustained price war. But it may not be sitting as comfortably as thought

That Russia, and indeed Opec members, seriously underestimated the demand-side impact of Covid-19 when they walked away from the negotiating table in March and committed to unconstrained supply is beyond question. But the received wisdom that Russia—due to currency weakness better supporting its margins while the dollar price of oil falls—is better placed to weather a drawn-out battle of attrition may be less clear-cut. And it may influence Moscow’s negotiating position tomorrow. When it walked away last month, Moscow believed it had the coronavirus outbreak under control and hoped that the world—or at least the parts that generate the most oil demand—did too. It was wrong. Now Russian presi