As OPEC production cut Vienna meeting developments flood Twitter with oil markets hanging on every word, OPEC may be ready to end its alliance OPEC+ heavyweight Russia after today’s meeting between OPEC and non-OPEC members ended with no deal.
OPEC and the Coronavirus have been pressuring Russia for weeks as oil prices have tumbled to sub-$50 per barrel, but Russia has so far decided it doesn’t want to participate in further production cuts to offset the loss in demand.
After OPEC so brazenly decided on collective OPEC+ cuts of 1.5 million bpd without Russia’s input or blessing, the oil cartel—that used to be able to go it alone when it comes to manipulating markets—decided the non-OPEC members would need to cut 500,000 bpd of that. With Russia being the largest producer in that group, it is assumed that it would have to shoulder most of those cuts.
But Russia didn’t appreciate the audacious decide-now-ask-permission later routine, and today, at the meeting in Vienna, Russia failed to agree to any additional cuts—let alone a 500,000 bpd one. Instead, Russia agreed only to rolling over the current cuts through the next quarter.
“Today will be a regretful day” Saudi’s oil minister said after the meeting ended, according to Amena Bakr, Energy Intel Deputy Bureau Chief, quoting meeting delegates.
However, talks between OPEC and OPEC+ delegates will continue according to a post-meeting statement.
Twitter rumors suggested that delegates had said they may walk out over its alliance with Russia.
Other rumors from recent weeks circulated that OPEC may decide to go it alone with additional production cuts that the Joint Technical Monitoring Committee suggested before the meeting. OPEC denied those rumors.
OPEC and Russia do have a history of drama leading up to production cuts, and Russia has ended talks with no deal before, only to return to the negotiating table to get a deal done.
By Julianne Geiger for Oilprice.com
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