The Russia’s refusal to increase oil production

US, WASHINGTON (ORDO NEWS) — Russia does not plan to increase oil production, despite the fact that since April 1, the deal to limit OPEC + oil production has lost its force, Bloomberg reports citing a source in one of the ministries.

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The Russia's refusal to increase oil production 2

According to the agency, this decision is associated with an overabundance of supply on the market: buyers are not able to purchase such an amount of oil.

Bloomberg found this decision peaceful.

In turn, the Wall Street Journal, referring to a Saudi official, said that the kingdom raised daily production to a record 12 million barrels per day, but could not find buyers for its oil and was now forced to fill tankers with raw materials and release from ports without a destination.

The kingdom explained this to the situation in the world because of the coronavirus pandemic that spanned about 180 countries.

The situation in the world oil market

Oil prices have almost halved since the beginning of March amid slowdown in market demand due to the outbreak of coronavirus, as well as the exhaustion of OPEC + agreements. On March 6, the countries of the alliance were unable to agree on either changing the parameters of the transaction or extending it.

In particular, Russia proposed to maintain the existing conditions, and Saudi Arabia – to further reduce development. As a result, from April 1, restrictions on production in the member countries of the former alliance are lifted.

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The Russia's refusal to increase oil production 3

At the same time, the media after the failure of the OPEC + negotiations began to write about the beginning of the price war of manufacturers. Thus, Reuters reported that Saudi Arabia is trying to oust Russian oil from major markets, offering instead its own at a lower price.

At the same time, the kingdom officially announced the increase from April of oil supplies to 12.3 million barrels per day, which is 300 thousand barrels per day higher than its production capacity, due to stockpiles.

Spokesman for the Russian President Dmitry Peskov said that Russia and Saudi Arabia are not waging price wars, but there is an unfavorable world situation.


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