- April 4, 2020
The meeting, planned for Monday, had buoyed hopes for a quick deal to end the turmoil in oil markets.
A meeting planned for Monday between officials of the Organization of the Petroleum Exporting Countries, Russia and other oil producers, which had buoyed hopes for a deal to end the turmoil in energy markets, has been put off, according to two OPEC delegates.
The news comes as lingering tensions have surfaced once again between Saudi Arabia, OPEC’s de facto leader, and Russia over who is to blame for the recent collapse in oil prices. On Friday, Russian President Vladimir V. Putin partly blamed Saudi Arabia for the price drop. The Saudis responded with angry statements from their ministers of foreign affairs and energy blaming Russia.
News of the meeting’s delay may roil the markets when trading resumes on Monday. The meeting, which was never officially announced but was widely reported on Friday, added to hopes that OPEC and Russia would agree on production trims.
On Thursday, President Trump said he believed that Russia and the Saudis were near a deal to cut production, prompting a surge of nearly 40 percent in oil prices, to about $34 a barrel for Brent crude, the international benchmark.
The OPEC delegates indicated that further talks would be required before moving ahead with a meeting, which has now been rescheduled for Thursday. Saudi Arabia had called for the meeting last Thursday, responding to pressure from President Trump. Sign up to receive our daily Coronavirus Briefing, an informed guide with the latest developments and expert advice.S
In early March, Russia declined to go along with a Saudi-led OPEC proposal to further trim production to deal with the plummeting demand for oil because of the coronavirus epidemic, leading the Saudis to walk away from a three-year agreement with Moscow on production trims. Recently, the Saudis have been increasing production and offering steep discounts to their customers.
On Friday, Mr. Putin said that these Saudi actions were one “reason behind the collapse of prices.” The Saudi foreign minister, Prince Faisal bin Farhan al Saud, responded in a statement carried by the official Saudi Press Agency that Mr. Putin’s comments were “fully devoid of truth” and that “Russia was the one that refused the agreement.”
Mr. Putin did indicate that he was willing to have Russia participate in the now-delayed meeting.
The Saudis want Russia and other producers to absorb some of the burden of new production trims. They are also hopeful that American oil producers will somehow share in output reductions.
Analysts estimate that because of the fallout from the coronavirus pandemic, demand for oil is likely to fall by as much as 25 million barrels a day, or about a quarter of consumption in normal times, meaning that if oil producers don’t reach agreement on output curbs, involuntary shutdowns are likely to occur as refineries and other customers slash their purchases of crude and storage tanks fill up.
By Stanley Reed