It appears that the latest in the many seemingly immutable systems that the COVID-19 pandemic has undone is global oil markets, and how the world’s largest energy producers measure their own power and profits. On Sunday, after a month-long oil war that saw prices cut in half, the conflict’s two main protagonists—Russia and Saudi Arabia—reached a supposed truce, in which oil-producing nations will cut output by nearly ten million barrels a day. President Trump presented himself as peacemaker and made vague notions that the United States would decrease its oil production, too.

This new multilateral oil pact, forged with unprecedented U.S. involvement, would seem to be a new form of energy diplomacy with potentially deep implications, at a time when the global economy is facing great turbulence and a likely recession. But the truth is that the deal may prove little more than a short-term measure—and Russia, the country that, more than any other, provoked the standoff, may end up looking like a gambler who greatly overplayed his hand.

The world looked very different just a month and a half ago, when Moscow and Riyadh each decided that it had an advantage over the other, with political leaders in both capitals calculating that they, and not their rivals, were better equipped to weather the financial pain of a price war. The two countries had reached loggerheads over future production cuts as part of the OPEC+ grouping, created in 2016, which saw Russia and a handful of other oil producers—but not the United States—join existing cartel members. The logic was based on simple market economics: producers would agree to limit supply in an effort to keep prices up.

The arrangement initially worked, in part—oil prices rose from a low of twenty-seven dollars a barrel in 2016 to more than sixty by the end of 2019—but was less than perfect. For reasons of climate and geology, Russia’s oil wells are less flexible than Saudi ones: they can’t simply be turned off today and then back on again tomorrow. Decreasing output in Russia would risk damaging wells and losing some fields for years, if not forever. That meant Russian oil companies kept on pumping far more than the country’s officials had nominally promised. Mikhail Krutikhin, a partner at RusEnergy, a consultancy in Moscow, told me of his conversations with Russian oil engineers. “How do you manage to do what OPEC+ requires?” he recalled asking them. “We keep on drilling wells, and pretend we aren’t,” they replied, laughing.

Many leaders in Moscow—especially Igor Sechin, a longtime Putin confidant and head of Rosneft, the state oil giant—were opposed to any cuts at all within the OPEC+ framework. As the logic went, by agreeing to limit the amount of oil it pumps, Russia was depriving itself of potential revenue; while, as a result, high prices made the drilling of shale oil in the United States economically feasible, and U.S. shale producers, unbound by OPEC+, could pump as much as they wanted. Sechin also had personal reasons for making such an argument: he wanted Rosneft to develop ambitious and expensive new oil fields in the Arctic, but, as long as the company was limited by OPEC+ rules, those projects were impossible.

Unfair or not, OPEC+ was at first profitable for Russia: in the course of three years, the agreed-upon production cuts brought Russia an additional hundred and twenty billion dollars in hydrocarbon revenue. But, as demand for oil began to fall early this year, taking prices down with it, the winking understanding that undergirded the arrangement was superseded by clear-eyed economics. In early March, Saudi Arabia demanded that OPEC+ members make further cuts of a million and a half barrels a day. With prices falling, the crown prince, Mohammed bin Salman, and other powerful figures in the Saudi energy industry were less inclined to close their eyes to Russia’s spotty adherence to collective reductions. While both sides would later accuse each other of brinksmanship, the standoff was set: either Russia agrees to a new round of cuts, or OPEC+ falls apart, with its members pumping as much oil as they want.

By that point, the effect of COVID-19 in China was already putting pressure on supply chains and decreasing global economic output. To the Kremlin, limiting production to try and keep prices up looked like a pointless, or at least ineffectual, pursuit. “We cannot fight a falling demand situation when there is no clarity about where the bottom is,” Pavel Sorokin, Russia’s deputy energy minister, told Reuters. Sechin picked the right moment to make his argument again to Putin, bringing him a personal letter—a copy of which was obtained by Reuters—in which he argued that the OPEC+ deal gave a “preferential advantage” to the United States and thus posed a “strategic threat” to Russia. Sechin reportedly also told Putin that Russia needed to strike at the U.S. shale industry and the Saudi budget “at the most painful moment”—that is, at a time of already softening demand for oil.

The final straw may have been the clash of personalities between Mohammed bin Salman, known for his boldness—or, rather, recklessness—and Putin, who, more than anything, hates being put into a corner. “Putin does not tolerate the language of ultimatums,” said Vladimir Milov, who formerly served as Russia’s deputy energy minister, and is now an opposition politician close to Alexey Navalny, the country’s main anti-Putin leader. “As I imagine it playing out, the Saudis tried to pressure us, and Putin told them to go to hell.”

On March 6th, at a meeting in Vienna, Saudi and Russian representatives failed to reach an agreement. “The negotiations ended, everyone slammed the doors shut behind them,” Fyodor Lukyanov, the editor of Russia in Global Affairs, and a well-connected figure in Moscow foreign-policy circles, told me. Saudi Arabia responded not merely by producing oil at pre-OPEC+ levels but also dumping two million barrels of additional oil, priced at a steep discount. Oil prices fell thirty per cent in a day; the ruble lost ten per cent of its value compared to the dollar. Still, the prevailing attitude in Moscow in the early days of March was that Saudi Arabia would have to fold first. “Things will be bad for them, but we’ll manage to hold on,” Lukyanov said, paraphrasing the mood.

The confidence hinged on the price of oil at which each country’s national budget is balanced. For Russia, that number is forty to forty-five dollars a barrel; for Saudi Arabia, it is eighty to eighty-five. Missing in that calculation, however, is that the high Saudi figure is based on ambitious and costly projects like the Saudi Vision 2030 initiative, whereas the Russian number is what the state indeed needs to function without deficits. If necessary, Riyadh could limit or even cancel its excess spending and still be relatively fine.

At the same time, the notion that low prices would kill off U.S. shale producers was shaky. In general, extracting shale oil is profitable at prices of about fifty dollars a barrel. But, unlike bloated, state-owned giants like Rosneft, U.S. shale involves myriad companies, and the ones that don’t go bust are able to minimize or even shut down production for a while, then ramp it up again later, if and when prices rise. The Putin-Sechin bet was that Russia could take on Saudi Arabia and the U.S. oil industry, outlasting each with a combination of resources—Russia has amassed more than five hundred and sixty billion dollars in sovereign reserve funds—as well as fortitude, and plain-old chutzpah.