Russia Saudi Agreement

According to the sources, there is still no agreement on whether an OPEC production meeting is to take place on Thursday, the main obstacle being relations with countries that have not achieved the deep supply cuts required under the existing pact. The deal or not, Mr. Trump`s unusual oil diplomacy and his zeal to win a victory reflect his growing concerns about the U.S. coronary flu economy. He also points to his sudden dependence on the foreign oil industries, after years of happy talking about the growing energy independence of the United States. But if Mr. Putin and Prince Mohammed fail to reach an agreement to support world oil prices, Mr. Trump will be twisted to the wind by two repressive leaders whose goodwill he has cultivated for years at considerable political cost. As a result of the COVID 19 pandemic, plant production and transportation declined, which also led to a decline in aggregate oil demand and oil prices. [14] February 15, 2020, the International Energy Agency forecast that demand growth would fall to its lowest level since 2011, with growth of 325,000 barrels per day over the full year, to 825,000 barrels per day and a decline in consumption of 435,000 barrels per day in the first quarter. [15] Although global oil demand has declined, a drop in demand in Chinese markets, the largest since 2008, triggered an OPEC summit on March 5, 2020 in Vienna. At the summit, OPEC agreed to further reduce oil production by 1.5 million barrels per day by the second quarter of the year (an overall production cut of 3.6 million bpd from the original 2016 agreement), and the group is expected to review that policy on June 9 at its next meeting.

[16] OPEC has asked Russia and other non-OPEC members to comply with OPEC`s decision. [13] On 6 March 2020, Russia rejected the request, marking the end of the unofficial partnership, as oil prices fell by 10% after the announcement. [17] Later, on 3 April, the Saudi foreign and energy ministers issued statements criticizing Putin and accusing Russia of not participating in the OPEC agreement. [38] Saudi Arabia, the de facto head of OPEC, on Thursday called for an emergency meeting of OPEC oil producers and non-OPEC members, an informal group called OPEC, according to government media, and said they aimed to reach a fair deal to stabilize oil markets. Trump will meet separately with U.S. oil industry leaders on Friday. “Any agreement on the extension of the cuts is conditional on countries that failed to fully comply with their cuts in May compensate for their overproduction,” the source said. Neither Russia nor Saudi Arabia has publicly claimed such a reduction, and a Saudi statement issued on Thursday simply called for a meeting of oil-producing nations to reach a “fair agreement.” The Kremlin has cast further doubts about the possibility and denied a statement by Mr Trump on Twitter that Mr Putin had discussed the matter with the crown prince. But some energy analysts have predicted that even after a supply cut, global oil prices will soon resume their sharp decline, with markets oversupplied at least in the first half of the year. A recent Citibank research report said that any potential agreement by American, Saudi and Russian officials “looks like it is too little too late.” On March 8, 2020, Saudi Arabia launched a price war with Russia, which facilitated a quarterly drop of 65% in the price of oil. [1] In the first weeks of March, U.S. oil prices fell by 34%, crude oil by 26% and Brent oil by 24%.

[2] [3] The price war was triggered by a breakdown in the dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over planned oil production cuts in the midst of the COVID 19 pandemic. [1] Russia left the agreement, which led to the downfall of the OPEC alliance.

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