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OPEC attempts to convince Russia to further cut production

US, WASHINGTON (NEWS OBSERVATORY) — Saudi Arabia and other OPEC members were working on Wednesday to convince Russia to accept a further reduction in oil production in order to reverse the price cuts caused by the coronavirus epidemic.

A technical team of several representatives of OPEC member states, Russia and other producers on Tuesday recommended a reduction in crude oil production of between 600,000 and one million barrels per day (bpd) in the second quarter alone.

It also proposed that the current program to reduce the production of 2.1 million bpd by the Opep + group (Opep and its allies) be extended until the end of 2020.

Russia has so far shown itself ready to renew the program to cut production, but warned that it would be difficult to sign an agreement for a more sustained reduction in extractions.

“OPEC hopes for a reduction of more than a million, but Russia remains an obstacle,” said a cartel source, adding that the outcome would depend mainly on the meeting that took place on Wednesday between the Saudi and Russian oil ministers, Prince Abdulaziz bin Salman and Alexander Novak.

The two ministers have not made any public statements since arriving in Vienna.

A barrel of Brent oil has lost 15% of its value since the start of the year due to the drop in demand linked to the coronavirus epidemic which is affecting the world economy and has killed more than 3,000 since December.

On Wednesday, black gold was trading at around $ 52 a barrel, an insufficient price for many OPEC countries to balance their budgets.

Russian President Vladimir Putin however ruled on Sunday that current crude prices are acceptable for his country’s budget.

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Article is written and prepared by our foreign editors from different countries around the world – material edited and published by News Observatory staff in our US newsroom.