The Saudi Arabia-Russia oil war, explained

“three years ago Russia made a deal to coordinate its production levels with the group, in a pact known as OPEC+.”

“Saudi Arabia, the cartel’s leader, suggested the participants collectively cut their oil production by about 1 million barrels per day, with Russia making the most dramatic cut of around 500,000 barrels a day. Doing so would keep oil prices higher, which would bring in more revenue for nations in the bloc whose economies are heavily dependent on crude exports.”

“Riyadh considered the move necessary as Asia, which is roiling from thousands of cases of coronavirus mainly in China and South Korea, no longer consumes as much energy as it did only a few months ago. China’s refineries, for example, cut their imports of foreign oil by about 20 percent last month. Lower demand leads to a drop in the commodity’s price, which thus hurts countries’ bottom lines.

The Russians, wary of such a move for weeks, opted against the plan. It’s still unclear exactly why that’s the case. Some say Russia wants prices to stay low to hurt the American shale oil industry or is gearing up to seize a bigger sliver of Asian and global oil demand for itself.

“The Russians are more worried about market share and think they’d do better competing with the Saudis rather than cooperating at this point,” says Emma Ashford, an expert on petrostates at the CATO Institute in Washington.

Saudi Arabia didn’t take too kindly to the Kremlin’s decision and responded by slashing its export prices over the weekend to start a price war with Russia. That brought the price per barrel down by about $11 to $35 a barrel — the biggest one-day drop since 1991.”

Trump called on Congress to pass a drug prices bill. Democrats reminded him they already did.

“The House bill — H.R.3 — has a few mechanisms for reducing prescription drug prices, but most notably, it would allow the US health department to directly negotiate the prices it will pay for up to 250 drugs every year. The Congressional Budget Office (CBO) has estimated the bill would save Medicare up to $450 billion over 10 years because of those new negotiating powers. CBO has also projected about eight fewer drugs (out of an expected 300 over 10 years) would come to the market in the next decade because of the decrease in revenues for drug makers.

Despite Trump’s promises on the 2016 campaign trail that he would support proposals allowing Medicare drug negotiations, the White House threatened to veto the House plan. They called it a plan to institute government “price controls,” and said it would limit access to medicine, a favored talking point of the pharmaceutical lobby.

Even without this veto threat, H.R.3 is expected to be dead-on-arrival in the Senate. Senate Majority Leader Mitch McConnell has shown no interest in taking up the bill.”

“Instead, Trump has aligned himself more with Republican Sen. Chuck Grassley, who has advanced a narrower set of reforms from his perch as the Senate Finance Committee chair. (Grassley has also accused McConnell of sabotaging his bill, which moved out of Grassley’s committee with bipartisan support.)

His committee sent a bill to the full Senate in the fall, though it has languished there in the months since. It’s unclear if Trump’s quasi-endorsement — he did not call out Grassley’s bill directly Tuesday night, instead praising the senator generally for his individual work on the issue — will provide any new momentum for the plan. Grassley’s bill, as the Brookings Institution documented, achieves pricing reform through a mix of technical changes to the rebates that drug makers pay under Medicare and Medicaid as well as provisions to cap out-of-pocket drug costs for seniors.

Right now, neither of the bills seems on a fast track to anywhere. Part of this is because Trump’s interest in drug pricing has been scattershot at best, and many Republicans are reluctant to place too many new regulations on an innovation industry.”

Sorry, Bernie Sanders: Taiwan’s Single Payer System Isn’t an Argument for Medicare for All

“Sanders’ Medicare for All bill calls for no copays and no premiums and effectively outlaws private insurance as we know it. It is substantially more generous than Taiwan’s system, which means it would be substantially more expensive.”