Russia and Saudi Arabia May Reach an Oil Production Accord
Russia and Saudi Arabia could reach an agreement on oil production. Both executives are very close to a consensus, according to the managing director of the Russian sovereign fund RDIF. Kirill Dmitriev, the CEO of the Russian Direct Investment Fund, said that it’s evident for the whole market how vital the agreement is. It will bring a lot of stability.
The meeting, which was scheduled for Monday between OPEC and its allies moved to Thursday. The parties will discuss the details of oil production. Dmitriev said he believes they are very close to an agreement between Riyadh and Moscow. Russian President Vladimir Putin also pointed out last week that it’s essential to reach an agreement for which Russia is committed.
Besides, he added that Russia is working closely with the US authorities to participate in the production cut. Russia, Saudi Arabia, the United States, and other countries need to intervene to stabilize markets. And to achieve stability in the world. We are probably about to see the most significant recession in history.
Brent falls 1.25% on expectations of the OPEC-Russia meeting
The price of a barrel of Brent crude for delivery in June fell on Monday in the London futures market by 1.25% in anticipation of the emergency telematic meeting of OPEC and Russian partners.
North Sea crude, Europe’s benchmark, was trading on the international exchange futures at $33.72. It was a slight drop from Friday when it closed at $34.15.
In March, oil prices plummeted after the last meeting of OPEC+, which includes the Organization of Petroleum Exporting Countries (OPEC) and other large producers, ended without an agreement. It prompted Saudi Arabia to start a price war that further aggravated the situation caused by the collapse in demand as a result of the Coronavirus pandemic.
The oil price war triggered a significant drop in the price of oil. US oil prices declined 34%, and crude oil plummeted by 26%, whereas Brent oil dropped by 24%.
A breakup triggered the price war in a dialogue between the OPEC and Russia over proposed oil production cuts during the Coronavirus pandemic. Oil prices had already fallen 30% since the start of the year due to a drop in demand. The price war is one of the main causes of the presently ongoing global stock market crash.
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