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While OPEC+ agreed to a tentative deal to remove 10 million bpd off the oil market in the next two months, Saudi Arabia says that affordable energy supply would be crucial to the economic recovery from coronavirus-inflicted recessions.
“Having affordable, reliable, accessible energy supply is considered a necessity to enable basic services, including health care, and help our efforts in assisting economic recovery,” Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, said on Friday during his opening speech at the video meeting of the G20 energy ministers.
The ministers of G20, currently chaired by Saudi Arabia, are discussing on Friday possible ways to contribute to a global oil production cut deal and to discuss energy developments and markets while the world is fighting the coronavirus pandemic.
The OPEC+ group has reached a tentative deal to collectively cut production by 10 million bpd and is also tentatively looking for another collective 5 million bpd cut from producers outside the OPEC+ format, mostly the United States, Canada, Brazil, and Norway.
The U.S. is signaling that its oil production will drop anyway because drillers are cutting spending and drilling at oil prices in the low $20s.
U.S. Energy Secretary Dan Brouillette said at the G20 video meeting that all nations should think about how they could contribute to reducing the oil market imbalance.
“We call on all nations to use every means at their disposal to help reduce the surplus,” Brouillette said in prepared remarks at G20, as carried by Reuters.
Countries relying on crude oil imports could soon unveil a plan to buy crude to put in their strategic reserves as a way to help crashing oil demand amid the oil glut, Fatih Birol, Executive Director at the International Energy Agency (IEA), told Al Arabiya news outlet on Thursday.
Countries importing oil “are going to contribute to the solution … by buying oil to put in their strategic reserves in order to give a lifeline to demand,” Birol told Al Arabiya.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.