Differences between Russia and Saudis on oil production

US, WASHINGTON (ORDO NEWS) — Russia and Saudi Arabia are arguing not only about the collapse of the previous deal to reduce oil production, but also about the conditions of the new one, Bloomberg learned.

The negotiations are complicated by the fact that both countries want to include the United States in the agreement, and Trump is critical of OPEC +. Other concessions may be used, the agency admits: for example, the abolition of part of the sanctions.

Russia and Saudi Arabia cannot agree on the parameters of a new deal to reduce oil production, Bloomberg said citing a source. According to the agency, both countries and other OPEC + participants are actively negotiating in time for the next meeting. It was planned for Monday, April 6, but will be rescheduled : according to Bloomberg sources, tentatively on April 9.

Saudi Arabia and Russia want the United States, which has become the world’s largest producer of fuel thanks to shale oil, also join the agreement and reduce production, writes Bloomberg. But US President Donald Trump on Saturday admitted that he would introduce new tariffs on the import of foreign oil to protect US energy companies. “I don’t care about OPEC,” Trump added.

It is not yet clear whether Russia and Saudi Arabia require the US to publicly promise to reduce production, Bloomberg notes: this is difficult to do, given that private companies operate in the US sector. According to the agency, we can talk about a “compromise gesture.”

Moscow would like to get some sanctions from the USA, the president of the Institute of World Economy and International Relations of the Russian Academy of Sciences Alexander Dynkin gave an example.

OPEC + is trying to agree to reduce production by about 10 million barrels per day, said Vladimir Putin. This is an unprecedented decrease in production, which amounts to about 10% of global supplies, Bloomberg notes. Oil producers know that either they reach an agreement, or the market itself will stop production due to overcrowded storage facilities, the agency said.

“This is also a battle of will between Putin, Saudi Prince Mohammed bin Salman and Trump. All parties are maneuvering to avoid responsibility in case of failure of negotiations,” Bloomberg believes.

Russia and Saudi Arabia argued at the end of the week due to the collapse of the last OPEC + deal. On Friday, Vladimir Putin said that Saudi Arabia had withdrawn from the OPEC + deal in order to “get rid of competitors that produce the so-called shale oil” ( quoted from the Kremlin’s official website).

Putin noted that Saudi Arabia did not agree to extend the current deal on current conditions. Riyadh called Putin’s words “completely devoid of truth” and said that Russia had rejected the agreement, and the Saudis and 22 other countries had unsuccessfully tried to convince her to go for an additional reduction.

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