OPEC and Russia meet on Thursday to try to agree to record oil output cuts but their efforts to address the slump in prices wrought during the coronavirus pandemic have been complicated by mutual animosity and the reluctance of the United States to join the action.
FILE PHOTO: The sun sets behind a crude oil pump jack on a drill pad in the Permian Basin in Loving County, Texas, U.S. November 24, 2019. REUTERS/Angus Mordant/File Photo
Riyadh and Moscow, who fell out when a previous pact on curbing supplies collapsed in March, have signalled their agreement to deep cuts would depend on the United States and others outside a group known as OPEC+ joined in. Asked if a natural decline in U.S. oil output due to weak prices could count as a reduction, The Kremlin spokesman Dmitry Peskov said on Wednesday: “These are absolutely different reductions.”
To figure out how a cut would be shared among producers, Moscow, Riyadh and others would need to agree on what output levels to use as a baseline for calculating cuts. Saudi Arabia ramped up output to a record 12.3. million bpd in April, up from below 10 million bpd in March. The kingdom’s Gulf allies, Kuwait and the United Arab Emirates, also raised production.
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