An emergency summit of OPEC+ is postponed for several days. The participants took extra time to negotiations on the reductions of oil production.
OPEC+ postponed an emergency summit planned for 6 April, said on Saturday, April 4, the Agency Reuters with reference to sources in the organization. The new date for the summit can be 8 or 9 April. This will give more time for negotiations on reductions of oil production.
Moscow and Riyadh accuse each other of failure of the transaction
On the eve of Saudi Arabia refuted statements of the Russian side that the price of oil collapsed, in particular due to the release of Riyadh from the agreement within OPEC+. Vladimir Putin said that one of the reasons for the collapse in oil prices is Saudi Arabia quits the transaction OPEC+, “increase their production and simultaneous information, the announcement of readiness of our Saudi partners to provide discounts on oil. This, apparently, is connected with the attempts of our partners from Saudi Arabia to get rid of competitors, which extract so-called shale oil”.
The foreign Minister of Saudi Arabia Faisal bin Farhan al Saud said that the accusations of Vladimir Putin’s “completely devoid of truth” and a “distortion of facts is astonishing.” According to him, has rejected the agreement that Russia and Saudi Arabia and 22 other countries unsuccessfully tried to convince her to go on additional reduction of oil production and extend the duration of the transaction, approved by the Minister. Al-Saud said that his country wants to achieve a balance in the oil market, and Russia, by contrast, wants to keep prices at a low level for the fight with the producers of shale oil.
Saudi Arabia and Russia failed to agree on the fate of the transaction for the reduction of oil production in early March. Since the announcement of the collapse of the deal amid falling demand due to pandemic coronavirus oil prices fell by almost half.
Trump’s words caused a rise in oil prices
This creates serious challenges for many U.S. oil companies because they practice oil extraction method of fracking (hydraulic fracturing) is relatively expensive and the low prices make it unprofitable.
On 2 April US President Donald trump said that after a conversation with Saudi crown Prince Mohammad bin Salman al Saud, “who spoke with Russian President Putin” expects production cuts by Saudi Arabia and Russia by 10 to 15 million barrels, and perhaps much stronger. Words trump has provoked jump of the prices for oil grades Brent and WTI by more than 30 percent.
However, the Kremlin information on the negotiations of the Russian President with the Saudi Prince denied. “The conversation was not” – said Putin’s press Secretary Dmitry Peskov “Interfax”, adding that plans for such a meeting in the Kremlin there.