Russia agrees to reduce oil production by a million barrels per day, but under one condition
Russia is ready to reduce oil production by a million barrels per day, but in the case that the United States joins the deal. Earlier, President Vladimir Putin said that Moscow was ready to reduce production only along with the other large producers, including the United States and Saudi Arabia.
Bloomberg writes about this citing the sources. According to the agency sources, a wider coalition of oil producers may require a larger reduction in oil production. In this case, Russia may consider reducing it to 1.5 million barrels per day, although the Kremlin would not want this.
Thus the reduction in Russian production will be about 10% of the average daily production in the country, which in March reached 11.294 million barrels, Kommersant reported basing on the agency's information.
An emergency meeting in OPEC + format should be held in the nearest future. At first it was planned to arrange it on April 6, but later they moved up a date to April 8-9.
A few days earlier Donald Trump tweeted that Russia and Saudi Arabia supposedly agreed to reduce oil production, this significantly raised the price for it.
In the Kremlin the fact of the telephone conversation between the Russian president and the prince of Saudi Arabia was denied, but Vladimir Putin said that it is quite possible to reduce oil extraction by 10 million barrels per day, but only along with the rest of the major producers, including Saudi Arabia and the United States. A decrease of production by 10 million barrels per day is the one tenth of the total world production and almost 20% of total production in OPEC + countries and the USA.
It was reported that Saudi Arabia also announced its readiness to significantly reduce oil production, if Russia and the United States do it.
On March, 6 the participants of the OPEC + summit did not agree to reduce oil production. The first one to announce the unreadiness to prolong the agreement was Russia: and this led to a sharp collapse in oil prices. At minimums its Russian grade has even reached a value of $ 13 per barrel or even less.
Since April 1 the non-extended OPEC + agreement has ceased to be in force. Former allies of the organization of the exporting countries, Russia and Saudi Arabia pump oil at the maximum rate. This puts additional pressure on shipments, storage facilities and pipelines. According to data previously provided by Goldman, this month about 20 million barrels per day will be delivered to storage facilities. At this pace by mid-2020 there simply will not be any more capacity for the oil storage.