Saudi Russian Oil Agreement

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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] In comments to RBC, an economic news channel in Moscow, Leonid Fedun, the vice-president of Lukoil, Russia`s largest private oil group, compared the agreement with the 1918 Brest-Litovsk Treaty, when "the Bolsheviks had to make a humiliating and difficult deal with Germany." 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] [18] The latest news about the effectiveness of coronavirus vaccines, which have pushed oil prices to their highest level since their fall in April, probably made the agreement more difficult. In response to these higher prices, some oil producers saw less need to maintain supply and wanted to increase pumps to try to improve nearly a year with gloomy oil yields. Perhaps Russia can take solace in the fact that the whole idea of a cartel could soon be overtaken. Finally, Sunday`s agreement aims to reduce global production by 10%, but coronavirus shocks are expected to reduce demand by 30%. If even the largest oil deal of recent times cannot stop prices, what can be done? In this sense, the agreement, since the United States is now a player in global oil policy, has become an acceptable minimum for Russia.

Trump said the U.S. will cut production, even some of Mexico`s commitments to limit oil production. On 6 March, Saudi and Russian representatives failed to reach an agreement at a meeting in Vienna. "The negotiations have ended, everyone has closed the doors behind him," Fyodor Lukyanov, Russia`s editor-in-chief in global affairs and well-connected politicians in Moscow`s foreign policy circles, told me. Saudi Arabia responded not only by oil production at its pre-OPEC level, but also by dumping two million barrels of additional oil, which fell at a high price.


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