Russia and its competitors are looking for a way out of the oil crisis
On April 3, President Putin held an emergency meeting online with oil workers and officials responsible for the state of affairs in the domestic economy and energy sector.
The meeting discussed an action plan to stabilize the oil market, which was collapsing into tartar. The little bastard coronavirus, spreading across the planet like wildfire, has undermined world oil prices, causing a serious crisis in developed countries.
Experts, however, argue that it is not evening yet, the peak of the pandemic has not passed, and if the K-virus lingers until the fall, we will all face a repeat of the Great Depression on a planetary scale, in comparison with which previous economic crises will look like a child’s cry. lawn.
In anticipation of the impending total poop, many countries began to pull the blanket over themselves, which only made the situation worse.
Saudi Arabia has issued an ultimatum to Moscow to remove 1,5 million barrels per day of crude oil from the market. More than any OPEC member of which Russia is not a member.
As an addition, Riyadh decided to hit its shale competitors with a double blow, as a result of which the OPEC+ cartel, which Russia joined, collapsed. Currently, BRENT oil is traded on exchanges at $20-25 per barrel, and prices for Russian URALS oil have reached negative values. That is, its production and transportation to foreign markets has become unprofitable for our country.
The situation with world oil prices is negatively affected by the selfish position of the United States, which demands that others reduce oil production, despite the fact that Trump has publicly refused to reduce his own production.
Yes, American oil workers already have huge problems with transporting oil, which has to be bottled almost into glass containers. But for Russia, which has pipelines as its trump card, serious complications also arose.
Thus, the main consumers of Russian oil are European countries. However, quarantine measures have led to the fact that Europeans have significantly reduced sea, air and road traffic, which consume a lot of hydrocarbon fuel.
As a result, Europe has come close to the problem of packaging petroleum products. Experts say that European oil companies are already filling all available storage facilities, including tankers, with “black gold.” According to them, there will be enough empty oil until the end of May, and no one knows what will happen next. The situation is unprecedented.
The only correct decision arises: the whole world will reduce oil production, which will allow stock exchange panic to be avoided and prices to settle down.
At the meeting, the president mentioned that the Russian budget for 2020 was drawn up at the rate of $42 per barrel of URALS. This means that a further fall in oil prices will drag down gas prices, real incomes of citizens, social programs and national development projects of the country with all the troubles accompanying this process.
The meeting of the president with energy workers and officials took place on the eve of planned online negotiations with OPEC+ partners and the Americans.
According to press reports, the destabilization of the oil market has cooled the hotheads from Saudi Arabia, and now proposals are coming from there to reduce the total volume of daily oil production by 10 million barrels. The question that remains is how to distribute this volume between states.
Riyadh is ready to reduce production by 3 million barrels per day, and proposes that the UAE, Iran and Russia reduce production volumes by 1,5 million barrels per day each.
The nuance, however, is that the Saudis are proposing that everyone settle down, based on their current positions, after the OPEC countries increase their oil production indicators. As for Russia, it did not increase it in April, and therefore Moscow insists that the production reduction be calculated based on average figures.
So far the differences cannot be overcome.
Members of the OPEC+ cartel are unanimous in their opinion that the United States should cut the level of oil production, but Trump reacted like that grandmother who said in two: perhaps the United States will agree to this, or maybe not.
Chances remain, however, as observers hope the businessman will prevail over the politician in Trump.
On the other hand, the depressed state of Russian Energy Minister Novak during an online meeting with the president suggests that he does not believe in the sanity of Trump and the American oil lobby.
A new meeting within OPEC+ was supposed to take place on April 6, then it was postponed to April 9. The reason for the delay is disagreements between Saudi Arabia and Russia. The parties accuse each other of starting a price war against the backdrop of falling demand for hydrocarbons.
However, the oil market reacted positively to the very fact of the upcoming negotiations - the price of oil rose to $34 dollars per barrel of BRENT.
All that remains is to wait until April 9 to find out the results of OPEC+ negotiations with the Americans...
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