US, WASHINGTON (ORDO NEWS) — Donald Trump and Vladimir Putin agreed on a telephone interview Monday for US and Russian energy officials to meet to discuss the global oil market collapse, a announced the Kremlin.
The deal marks a new twist in world oil diplomacy after this month’s breach of the pact between the Organization of Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and Russia on a cap on production. The divorce sparked a price war between Arabia and Russia that Donald Trump, before his interview with Vladimir Putin, called “crazy”.
The oil market is simultaneously facing a demand shock with the coronavirus pandemic, which has brought an abrupt halt to world activity and threatens oil-intensive sectors such as air transport and the automobile.
The price of a barrel of Brent crude fell to its lowest level since 2002 on Monday and that of light American crude briefly fell below $ 20, levels that threaten producers not only in the United States but in many parts of the world.
“Points of view on the current situation of the world oil markets were exchanged. It was agreed that there would be Russian-American consultations on this subject through the energy ministers”, according to the report made by the Kremlin of the meeting between the American and Russian presidents.
White House spokeswoman Judd Deere said the two leaders agreed on the importance of stability in global energy markets but did not mention the possibility of ministerial-level talks .
Moscow has not specified what exactly the discussions with Washington will be about, but Russia has previously indicated that it wants to see more countries involved in efforts to balance the oil market.
Shortly before his meeting with his Russian counterpart, Donald Trump ruled that Saudi Arabia and Russia had “both gone crazy” by going into a price war.
“I never thought I would say that we need an increase in the (price of) oil, because it is,” said the US president on Fox News.
The United States has become in recent years the world’s leading producer of oil with the development of shale soil exploitation, but current prices are below the breakeven points of many American companies.
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