OPEC Meeting Is Delayed as Saudi and Russian Tensions Flare

The OPEC delegates indicated that further talks would be required before moving ahead with a meeting, which has now been rescheduled for Thursday. Saudi Arabia had called for the meeting last Thursday, responding to pressure from President Trump.

In early March, Russia declined to go along with a Saudi-led OPEC proposal to further trim production to deal with the plummeting demand for oil because of the coronavirus epidemic, leading the Saudis to walk away from a three-year agreement with Moscow on production trims. Recently, the Saudis have been increasing production and offering steep discounts to their customers.

On Friday, Mr. Putin said that these Saudi actions were one “reason behind the collapse of prices.” The Saudi foreign minister, Prince Faisal bin Farhan al Saud, responded in a statement carried by the official Saudi Press Agency that Mr. Putin’s comments were “fully devoid of truth” and that “Russia was the one that refused the agreement.”

Mr. Putin did indicate that he was willing to have Russia participate in the now-delayed meeting.

The Saudis want Russia and other producers to absorb some of the burden of new production trims. They are also hopeful that American oil producers will somehow share in output reductions.

Analysts estimate that because of the fallout from the coronavirus pandemic, demand for oil is likely to fall by as much as 25 million barrels a day, or about a quarter of consumption in normal times, meaning that if oil producers don’t reach agreement on output curbs, involuntary shutdowns are likely to occur as refineries and other customers slash their purchases of crude and storage tanks fill up.

Article source: https://www.nytimes.com/2020/04/04/business/coronavirus-opec-russia-oil.html