Saudi Arabia-Russia oil talks delayed

Saudi Arabia-Russia oil talks delayed

Saudi Arabia-Russia oil talks delayed

Russian Federation and Saudi Arabia are set to hold a virtual meeting to discuss production cuts that President Trump has suggested could total 10 million barrels per day.

Riyadh and Moscow blamed each other for the failure and launched a battle for market share, sending oil prices to their lowest in two decades, which has strained budgets of oil-producing nations and hurt higher-cost producers in the United States.

The effects of the coronavirus pandemic have prompted investment banks and commodities traders to repeatedly slash their forecasts for global oil demand.

That frustration led in part to March's collapse of an OPEC+ supply deal that has propped up oil prices for three years.

A virtual meeting between OPEC and its allies was scheduled to happen on Monday, but is now "likely" to take place on Thursday instead, sources familiar with the matter told CNBC.

"Other producers, including the USA and Canada, should participate in this topic and there should be an agreement about production base of each country that is a basis for production cut", Zanganeh was quoted as saying.

The U.S.is a major producer of oil, and hundreds of thousands of American jobs depend on a Saudi-Russian deal to cut production and send oil prices back up.

As more countries impose strict virus containment measures, which halted most sectors of the economy, demand for oil is at record low.

The United States is not part of OPEC+ and the idea of Washington curbing production has always been seen as impossible, not least because of USA antitrust laws. But prices rose significantly last Thursday and were up again on Friday during early trading, after a tweet from U.S. President Donald Trump regarding a supposed 10-15 million barrels per day cut from Russian Federation and Saudi Arabia.

Iranian Oil Minister Bijan Zanganeh has said his country is against holding any OPEC+ meeting unless there is a clear proposal and projected outcome from such talks for the oil market, as follows from a letter sent to OPEC and seen by Reuters. "We spent two hours talking about how we can combat that to prevent the Saudis and Russians from bankrupting all the Texas producers, all of the USA energy producers".

While members of OPEC have indicated that they are willing to broker a detente, they have thus far insisted that the USA and Canada must play a role in curbing output.

There are concerns that onshore storage space for refined oil products may run out by the middle of April, forcing even deeper cuts which could trigger the largest number of well closures in history.

Both Trump and Putin said cuts should be around 10 million barrels per day. That compares with OPEC's estimate for demand to fall by 11.9 million barrels a day this quarter.

However, Trump had only hostile words for OPEC on Saturday, threatening tariffs on foreign oil, though at a briefing late on Sunday he said he did not expect he would have to use them. Am I doing it now? No.

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