Saudi Russian Agreement

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] Saudi Arabia and Russia have agreed on the principle of a reduction in oil production, the Wall Street Journal reported on Thursday. The Organization of Petroleum Exporting Countries is holding a virtual meeting with its allies, including Russia, with the goal of balancing the oil market, which has suffered from a drop in demand linked to efforts to stop the spread of COVID-19, and a price war between Moscow and Riyadh, which has submerged the world with crude oil. Under the agreement in principle, Saudi Arabia would withdraw 4 million barrels per day from production in April, while non-OPEC Russia would cut 2 million barrels per day, the Wall Street Journal reported. Iraq and other major OPEC oil exporting nations have not yet agreed on concrete cuts to oil production. May West Texas intermediate oil clk20 rose $1.02, or 4.1 percent, to $26.11 a barrel.

June Brent crude uk:brnm20 rose 70 cents or 2.1% to $33.54. On March 8, 2020, Saudi Arabia launched a price war with Russia, which facilitated a quarterly drop of 65% in the price of oil. [1] In the first weeks of March, U.S. oil prices fell by 34%, crude oil by 26% and Brent oil by 24%. [2] [3] The price war was triggered by a breakdown in the dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over planned oil production cuts in the midst of the COVID 19 pandemic. [1] Russia left the agreement, which led to the downfall of the OPEC alliance.

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