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US President Donald Trump and Russian President Vladimir Putin agreed on Monday to have energy officials from both countries discuss the dire state of the global oil market, the Kremlin said, according to Reuters.
Trump and Putin discussed the matter over the phone on Monday.
“Opinions on the current state of the global oil markets were exchanged. It was agreed there would be Russo-American consultations about this through the ministers of energy,” the Kremlin said.
Neither President detailed what specific issues or possibilities they would discuss.
Saudi Arabia and Russia have undertaken a furious battle over market share, with both threatening to ramp up production come April 1, when the current OPEC+ deal will expire. U.S. oil producers now find themselves stuck in the middle of this oil price war, and then COVID-19 kicked U.S. producers—and the rest of the world—in the head by pushing down demand for crude.
The result has elicited a somewhat atypical response from the United States oil industry and government officials, who favor free markets and never miss a beat to chastise OPEC for its price-meddling ways. But desperation is sinking in, with oil industry professionals and U.S. lawmakers calling on the Trump administration to do something about the current oil price war that OPEC and Russia have created.
While the U.S. is planning on sitting down with Russia to discuss the matter, it is also applying pressure to Saudi Arabia to rectify the mess it has helped to create. It would take—at a minimum—both Saudi Arabia and Russia to effect any real change. Even if all of OPEC were to get on board with further production cuts, it is doubtful at this point that even aggressive action will have enough oomph to trim the oil glut and boost prices at a time when the coronavirus continues to shrink demand.
If the United States somehow managed to jump on board the price-fixing cartel, however, it might be enough to move the needle.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.