To secure a supply curb that could support prices, the Kingdom must first overcome Russian resistance/Bloombergby Bloomberg
Saudi Arabia is urging the Organisation of Petroleum Exporting Countries and its allies (OPEC+) to agree to reduce oil production by more than one million barrels a day to compensate for the hit to demand from the global spread of the coronavirus.
Options discussed in Vienna include a reduction as big as 1.5 million barrels a day, but the talks are still underway and there was no agreement yet. To secure a supply curb that could support prices, the Kingdom must first overcome Russian resistance.
Saudi Arabia’s push reflects mounting concern that growth in fuel consumption could be wiped out this year as the outbreak wreaks havoc on the world economy.
Following oil’s biggest weekly slump since the 2008 financial crisis, energy ministers from OPEC+ members must overcome their differences to forge a deal, while also grappling with the risks of bringing together delegations from 23 nations as coronavirus continues to spread.
Iranian Oil Minister Bijan Namdar Zanganeh, whose country is enduring a severe coronavirus outbreak, arrived in Vienna without his usual cohort of government officials. Zanganeh refused to be drawn on the possible extent of production curbs and said that Russia is likely to wait until the last moment to make any decision.
The panel recommended a 600,000 to one million-barrel-a-day reduction in Q2 2020, more ambitious than curbs mooted in February but still short of some estimates of the demand loss.
With flights cancelled in Europe, schools closed in Japan, towns quarantined in Italy and a rising death toll from Iran to Washington state, the coronavirus crisis has gone global, and with it, its impact on energy demand.
In an effort to limit potential contagion as officials arrived in Vienna, OPEC said medical advisers would conduct screenings to detect staff or delegates who might have high temperatures. Some employees will be told to work from home. OPEC told national delegations to limit their size to the bare minimum, pressing ahead with the meeting even as conferences across the globe were cancelled.