Riyadh and Moscow are closer to an agreement on reducing oil production

As reported, during the OPEC + meeting, a reduction of 20 million barrels per day was discussed.

OPEC and other oil powers on Thursday held talks on record production cuts of up to 20 million barrels a day, which is about 20 percent of the global volume, to support prices that have fallen sharply amid the coronavirus pandemic, according to sources in OPEC and Russia.

The talks were complicated by friction between OPEC leader Saudi Arabia and non-member Russia, but sources said they managed to overcome differences.

“This is a global deal,” one OPEC source said, without specifying whether the agreement would include the US, as Russia and OPEC insist.

Against the background of measures to contain the pandemic, global demand for fuel fell by 30 million barrels per day.

The price of benchmark Brent crude last month hit an 18-year low and is now around $ 35 per barrel – half what it was at the end of 2019. This caused a serious blow to the budgets of oil powers and high-cost shale production in the United States.

US President Donald Trump said last week that the agreement between Saudi Arabia and Russia, reached through his mediation, will reduce production by 10-15 million barrels per day. Such indicators, although they are less than those announced on Thursday by sources, are unprecedented.

The largest reduction in production by agreement between OPEC members was carried out during the financial crisis of 2008: then it was about 2.2 million barrels per day.

Sources in OPEC also make it clear that such a large-scale reduction is possible if the US supports it. However, Washington has not yet shown signs of being willing to participate in the deal.

Kremlin spokesman Dmitry Peskov, speaking before the OPEC+ meeting, said that a new agreement is hardly possible without the participation of other countries.
The video conference started at 14.25 GMT.

The United States was invited to the meeting, but it is not known whether it participated. Washington says that the volume of production in the US is already gradually decreasing due to falling prices. Russia insists that this is not the same as a targeted reduction in production.

It is unclear what level of reduction Moscow and Riyadh are discussing. Russia insisted that the first quarter figures should be taken as a basis, while Saudi Arabia suggested April when its production volume increased sharply.

Author: Flyn Braun
Graduated from Cambridge University. Previously, he worked in various diferent news media. Currently, it is a columnist of the us news section in the Free News editors.
Function: Editor
E-mail: Braun.freenews@gmail.com