Two of the world's largest oil producer Saudi Arabia and Russia are likely to reach an agreement to cut production at a meeting scheduled for April 9, but only if the United States agree to join the effort. According to reports, Saudi Arabia and Russia after a month-long face-off have finally agreed to come to an agreement on cutting oil production in order to cope with the disastrous effect of the coronavirus outbreak on fuel demand. Media reports suggest that Saudi Arabia and Russia are continuing to flood the world market will surplus oil despite global demand dropping by roughly 30 per cent, or about 30 million barrels a day.
According to reports, the Organization of the Petroleum Exporting Countries (OPEC) plus Russia is talking about cutting oil production but wants non-OPEC nations to join the talks, particularly the United States. The meeting would be held via video conferencing at 2pm GMT on Thursday. The United States also wants Saudi Arabia and Russia to reach an agreement as it feels that the price-war between the two would affect major US oil companies and US production had started to fall due to the plunge in crude prices. The United States is the largest oil producer in the world and its shale companies were already filling the gap left by OPEC curbs which reportedly led to frustration on part of Saudi Arabia and Russia and caused in surplus production of oil by both countries.
As per reports, Russia and Saudi Arabia failed to agree on a plan to curb supply at the OPEC meeting held last month, following which both the countries boosted oil output to a record level. Media reports suggest that the flood of supply coming from Saudi Arabia and Russia could lead to the largest surplus of crude in history. According to reports, crude fell by $3.80 a barrel to settle at $30.05 last month, while the international benchmark fell as low as $29.52, lowest since January 2016.
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