OPEC offers Russia 1.5 million barrels of additional production cuts


“OPEC” agreed on Thursday to cut oil production by an additional 1.5 million barrels per day in the second quarter of 2020 to support prices affected by the outbreak of the Corona virus, but it made its movement conditional on the accession of Russia and other countries.
Expectations for oil demand declined due to government measures to contain the virus, prompting OPEC to consider its biggest cut since the 2008 financial crisis.
Expectations for demand growth in 2020 have shrunk as factories are disrupted, travel reluctant and other business activities slowed.
And Saudi Arabia is urging «OPEC» and its allies, including Russia, towards a significant reduction of up to 1.5 million barrels per day in the second quarter with the extension of current cuts of 2.1 million barrels per day, which expires this month, until the end of 2020.
But Riyadh, the largest producer in the Organization of the Petroleum Exporting Countries, and other members of the organization find it difficult to persuade Russia to support the move. Moscow still hints at its intention to support an extension of the cut rather than a new cut.
In the past, Moscow, which has been cooperating on production policy since 2016 as part of an informal group known as OPEC Plus, expressed hesitation during the negotiations, but was participating in the last moments.
The OPEC Plus ministers will meet today, Friday, in Vienna.
“OPEC” said in a statement after its ministers meeting that the outbreak of the Corona virus created a “unprecedented situation” and risks what would require action.
She said that the ministers agreed to cut an additional supply of 1.5 million barrels per day until June, and it is expected that countries outside the organization will contribute 500,000 barrels per day. The organization said this would be in addition to extending existing supply restrictions to the end of 2020.
OPEC said it would hold another ministerial meeting on June 9.
The Russian Energy Minister returned to Moscow for consultations, but he is scheduled to return to Vienna on Friday to attend the broader OPEC Plus meeting. (Reuters)


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