Relief in sight as Saudi Arabia plans to restore balance in global oil market, slates G-20 summit for April 10

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King Salman bun AbdulAziz of the Kingdom of Saudi Arabia.

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The Kingdom of Saudi Arabia has activated a plan to restore balance to the global oil markets, using its Presidency of the powerful G-20 group of nations, The DEFENDER gathered.

The Kingdom, which is organizing a special meeting of G-20 energy ministers including the other two biggest producers, the United States and Russia, to discuss cuts to output had recently met with Russian President Putin on this same matter that has weakened oil prices at the international market for some weeks now.

The special meeting described as “virtual” summit is scheduled for Friday, April 10, 2020 the day after an OPEC+ meeting of oil producers. Crucially, the United States, which is not an OPEC member, will be involved in the G-20 summit, energy secretary Dan Brouillette said.

The initiative emerged after a weekend phone call between Prince Abdul Aziz bin Salman, the Saudi energy minister, and Fatih Birol, executive director of the International Energy Agency. The involvement of the G-20 is part of the group’s remit, Birol said on Monday.

“The job description of the G20 is to provide and maintain financial stability, so it is in line with their aims,” he said.

“The oil industry is going through one of the worst times in its history, and this could have major implications for the global economy, financial markets and employment. Saudi Arabia has been a stabilizing factor in the markets for many years.”

Saudi Arabia and Russia were “very, very close” to a deal to cut oil output, said Kirill Dmitriev, chief executive of the Russian Direct Investment Fund and a close confidant of President Vladimir Putin. An agreement would “bring so much important stability to the market,” he said.

Nevertheless, significant challenges remain. So far, talks between OPEC+ members have focused on a cut of about 10 million barrels per day. This would not be enough to outweigh global market oversupply estimated at more than 20 million barrels, amid a demand slump caused by the coronavirus pandemic.

There are also concerns about whether US producers would be permitted to take part in cuts. American antitrust law prohibits cartel practices, which would rule out a concerted move by its many oil companies.

Some energy experts have suggested that action by the Railroad Commission of Texas, which regulates the energy business in the biggest US oil state, could help limit overall US output.

On the markets, amid the continuing uncertainty, Brent crude was trading about 5 percent down, at just over $32.


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