Oil Negotiators Race for Pact
Saudi Arabia, Russia and other large oil producers are racing to negotiate a deal to stem the historic price crash as diplomats said some progress was made on Sunday.
The talks still face significant obstacles: a meeting of producers from OPEC+ and beyond -- delayed once -- is only tentatively scheduled for Thursday, Bloomberg reported. Russia and Saudi Arabia want the US to join in, but US President Donald Trump has so far shown little willingness to do so.
Oil diplomats are trying to stitch together a meeting of G-20 energy ministers for Friday, part of an effort to bring the US on board, according to two people familiar with the situation.
Even the International Energy Agency, which represents industrialized energy-consuming nations, is calling for action.
“We see a huge oversupply in the oil market,” Fatih Birol, the head of the IEA, said in an interview on Sunday. “There’s a need for the G-20 in the driving seat, led by its current chair, Saudi Arabia.”
Crude prices have fallen 50% this year, as the economic effects of the coronavirus pandemic have knocked out about a third of global demand.
The price crash is so dramatic that it’s threatening the stability of oil-dependent nations, the existence of US shale producers, and poses an extra challenge to central banks.
Industry officials say that if a deal to cut supply in an orderly way isn’t reached, the market will simply force producers to slash output as storage space runs out.
The aim of talks, first revealed by Trump last week, is to cut oil production by about 10% -- the biggest ever coordinated reduction.
source: Financial Tribune
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