Saudi Arabia demands that Russia cut oil production

Cause of difficulties in negotiations on limiting oil production among OPEC countries and Russia was the ultimatum that Saudi Arabia has put Moscow.

Саудовская Аравия требует, чтобы Россия сократила добычу нефти

This is with reference to own sources reports Bloomberg, reports

Riyadh demands that Russia was removed from the market those 1.5 million barrels a day, which became the cause of discord and the collapse of the OPEC deal+ in past negotiations in early March. While Moscow did not accept the reduction of production for such amount for all participants of the agreement.

The parties generally agree that production in the aggregate should be reduced by 10 million barrels a day, the only question is how to divide the entire volume.

The quota of Saudi Arabia will be reduced by 3 million barrels, the United Arab Emirates, Iraq and Russia — to 1.5 million. But to consider offers from current levels, after OPEC sharply increased its production. So, Riyadh lifted her up from 9.8 million bpd to 12.3 million, this means that the reduction relative to March will amount to only 0.5 million barrels. The UAE production rose by one million barrels, Iraq 200 thousand.

Russia has increased production in April, keeping it at the level of 11.2 million. In this regard, it insists that quotas were applied to the average volume for the quarter. While these differences still cannot be overcome.

The parties agree only that to take part in reducing the production needs and American companies, however, the President of the United States Donald trump has not yet confirmed this intention. “Can we take him in, maybe not” — he answered a question about whether Washington’s decision to lower production.

It is the trump announced a new format of negotiations OPEC+. After talking with the crown Prince of Saudi Arabia Mohammed bin Salman, he announced that the market may take 10-15 million barrels. However later the White house clarified that this amount should give Russia and OPEC, and the US is no obligation on not take.

It was expected that the OPEC meeting+ will take place on 6 April but it was postponed to the 9th number. One of the reasons sources say the dispute between Moscow and Riyadh responsible for the beginning of a price war. They have shifted responsibility on each other for the fall of raw material prices more than doubled amid slump in demand.

However, the oil market is feeling positive regarding the upcoming negotiations. Brent oil is holding at 34 dollars per barrel, almost $ 10 higher than before the first reports about the deal.