Russia and Saudi Arabia almost done negotiating oil production cut deal

The largest members of the OPEC+ group — Russia and Saudi Arabia — have tentatively agreed on a significant reduction in oil production, Kommersant reports.

It is expected that each OPEC+ country will reduce production by 22%, which will reduce it as a whole by 10 million barrels per day for the period from May to June. It is then expected to reduce the production to 8 million by the end of 2020 and to 6 million by April 2021.

In the beginning, Russia and Saudi Arabia will eventually lose about 2.4 million barrels per day. At the same time, it will be a real decline in production for Russia, while Saudi Arabia will almost return to the level of March.

Negotiations on reducing oil production will continue on April 10. The final agreement may be reached at that time.

On April 1, the deadline for OPEC+ oil production reduction, which OPEC countries, Russia and several other oil-producing states concluded at the end of 2016, expired.

For more than three years, this deal allowed to keep prices at $50 per barrel and above.

At the last OPEC+ meeting in Vienna on March 6, the partners failed to agree on an extension of the agreement because Russia offered to keep production at the same level, while Saudi Arabia, the largest OPEC member, insisted on an additional reduction due to falling demand caused by the pandemic.