Cooperation between Russia and the Organization of Petroleum Exporting Countries (OPEC) has got to an abrupt stop after Moscow refused to back new deeper cuts on oil output.
The OPEC and non-OPEC countries held the consultations on oil cuts in Vienna on Friday, yet failed to agree on them. The move has sent oil prices into a downward spiral.
The talks followed the OPEC decision to cut the output by an extra 1.5 million barrels per day (bpd) in the second quarter of this year — but only if Russia joins in.
The new cuts were expected to come on top of the already existing cuts of 2.1 million bpd, becoming the largest ones since the 2008 financial crisis.
Russia, however, has rejected the new cuts, calling only for extension of the already standing ones — and the disagreement within the so-called OPEC+ has effectively brought the existing system of restrictions down.
So far, it remains unclear whether Russia will increase its oil output. According to Novak, it depends on “the plans of the companies.”
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman was even more ambiguous and dodged the question on the kingdom’s potential plans to ramp up its production altogether.
Global crude prices plummeted on Friday on the news, with Brent crude trading over 5% lower at $47.55 per barrel, and US benchmark West Texas Intermediate (WTI) falling nearly as much to $43.57.
RT. com / ABC Flash Point News 2020.