Saudi Arabia and Russia signalled on Thursday they were ready to cooperate to help stabilise the oil market after calls with U.S. President Donald Trump to discuss the slump in prices triggered by the end of a deal to curb output and a collapse in demand.
After the deal collapsed, Russia and Saudi Arabia both said they were ready to raise production but Russian Energy Minister Alexander Novak told Reuters on Thursday it had no plans to crank up its crude output.
U.S. President Donald Trump said on Wednesday he had talked with Saudi and Russian leaders and believed the two countries would make a deal to end their price war within a few days, lowering output and bringing prices back up.Stabilising the oil market through output cuts is likely to be tough in the current environment because oil demand has fallen by almost a third, or at least 20 million barrels per day, meaning significant reductions would be required.
“Saudi Arabia has always welcomed and supported cooperation among oil producers in their efforts to stabilize the oil market during the current crisis, based on the principles of fairness and equity,” the Gulf source told Reuters. The flood of Saudi oil comes amid an unprecedented fall in demand as billions of people stop using cars and taking flights because they are under lockdowns to prevent coronavirus from spreading.
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