Russia Oil News 2020: Crude Oil News Russia and Saudi Arabia | OPEC & Russia to extend record oil cuts

By | June 7, 2020

Russia Oil News 2020: Crude Oil News Russia and Saudi Arabia | OPEC & Russia to extend record oil cuts:

Russia Oil News 2020

The OPEC, Russia and other allies were set on Saturday to extend record oil production cuts until the end of July after crude prices doubled in the past two months on the back of their efforts to withdraw almost 10% of global supplies from the market.

The Saudi Arabia and Russia will continue to take the bulk of the nearly 10m barrels a day of cuts, but the two countries emphasized they wanted to see stronger compliance from other members as they held a virtual meeting on Saturday.

Over the weekend, the dispute between Moscow and Saudi Arabia over who is to blame for plunging crude prices intensified.

Organization of Petroleum Exporting Countries (OPEC) is an international organization created in 1960 to stabilize the cost of raw materials. There are 12 participants in the cartel: Saudi Arabia, Venezuela, Ecuador, Iran, Algeria, Angola, Iraq, Kuwait, United Arab Emirates, Libya, Nigeria, Qatar. The largest oil producers are Saudi Arabia (31.5% of the total production), Iraq (10.7%), Kuwait and the United Arab Emirates (9.2% each) and Iran (8.9%). The Russian Federation is an observer at OPEC, takes part in organization conference sessions, meetings and other events with third states.

Putin, speaking on Friday during a video conference with government officials and the heads of major Russian oil producers, said the first reason for the fall in prices was the impact of the coronavirus on demand.

Amid the financial crisis and the fall in oil prices to $ 32.40 from $ 147.27. During 2009, the cost of “black gold” increased by 78%. Since 2011, the cartel has set a total daily production quota of 30 million barrels, which it did not reduce even against the backdrop of a sharp drop in oil prices in 2014. Most experts attribute this to the desire of the largest producer of raw materials in Saudi Arabia to maintain a market share.

Moscow received the corresponding status in 1998, at the same time, together with Mexico City and Oslo, it agreed with the cartel to reduce oil production to prevent the cheapening of black “gold”. In 2008, OPEC went for the largest phased decrease in daily production by 4.2 million barrels in its history.

“The second reason behind the collapse of prices is the withdrawal of our partners from Saudi Arabia from the OPEC+ deal, their production increase and information, which came out at the same time, about the readiness of our partners to even provide a discount for oil,” Putin said.

At a meeting in Vienna on November 30, OPEC oil exporting countries for the first time since 2008 agreed to reduce oil production by 1.2 million barrels per day (b / s) to 32.5 million b / s. In total, together with non-cartel countries, oil production was reduced by 1.8 million barrels. per day (by 558 thousand barrels of oil per day, reduced the country’s production outside OPEC).

The Saudi Foreign Minister Prince Faisal bin Farhan Al Saud disputed Putin’s claims, saying Russia had withdrawn and that statements about the kingdom’s withdrawal from the OPEC+ deal was devoid of truth, state agency (SPA) reported on Saturday.

Saudi Arabia energy minister Prince Abdulaziz bin Salman also issued a statement Saturday saying comments from Russia’s energy minister Alexander Novak “were categorically false and contrary to fact.” The statement said the Saudi minister ‘expressed his surprise at the attempts to bring Saudi Arabia into hostilities against the shale oil industry.”

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