Russia ready to reduce oil production in a new deal by 14%

US, WASHINGTON (ORDO NEWS) — Russia is ready to reduce its oil production by 14% and will offer such an option to the expanded composition of OPEC +, which will meet on Thursday to discuss a new deal. Moscow and the Saudis managed to achieve the main goal – to attract the United States to the deal, says a RBC source.

Russia expects that not only OPEC + countries, but also other large fuel producers, including the USA, Brazil, Norway, Canada, Mexico and others, will join the new deal to limit oil production, a source close to the Ministry of Energy told RBC. The representative of the ministry confirmed this. The total production by these countries is 70 million barrels per day.

If a deal can be negotiated, Russia is ready to reduce its production by about 1.6 million barrels per day. This is 14% of the level of production in the first quarter of the year – in proportion to the country’s share in total production and taking into account the general decline of 10 million barrels per day, a source told RBC and confirmed the representative of the Ministry of Energy.

This possible volume is five times higher than the previous level (0.3 million barrels per day), which was established by the OPEC + transaction in December 2019. Then the total reduction by all parties to the transaction amounted to 1.7 million barrels per day (plus an additional 0.4 million barrels by Saudi Arabia in the amount of 2.1 million barrels per day).

Russia would be ready to consider the possibility of reducing oil production by about 1 million or 1.5 million barrels a day as part of an agreement with OPEC on condition that the United States, the world’s largest oil producer, will also join the deal, noted Bloomberg, citing unnamed sources.

Moscow also hopes for concessions to the US administration on other issues – probably to ease sanctions, two Bloomberg sources said. The Ministry of Energy really expects the United States to join the deal, RBC writes. The United States will also reduce production in proportion to its share in total production of 70 million barrels per day, the source said.

Both Saudi Arabia and Russia, the two leaders of OPEC +, wanted to draw the Americans into a new deal, Bloomberg wrote . US President Donald Trump became a mediator in the negotiations between Moscow and Riyadh at the height of the price war, but he himself criticized OPEC.

The United States would naturally reduce production by at least 4 million barrels per day, Ryan Sitton, head of the Texas Railroad Commission (who regulates the industry in the US oil state), admitted on Twitter. He noted that he would not participate in a videoconference with an expanded OPEC + and other countries, which is scheduled for April 9.

These will be the first negotiations of the oil ministers of OPEC countries and Russia for the first time after the deal was broken in March. On Friday, negotiations are scheduled for oil in the G20 format, including with the participation of the United States.

The previous OPEC + deal fell apart in March. Russia insisted on maintaining the current production levels at that time, and Saudi Arabia – on an additional reduction. At the end of last week, two countries argued about exactly who initiated the gap: Vladimir Putin accused Riyadh, and there they called the words of the Russian president “deprived of the truth.”

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