NOPEC! Oil prices plummet after Russia rejects new crude production cuts
Moscow has refused to back the Organization of Petroleum Exporting Countries (OPEC) in extra reductions in oil output and would only agree to extend existing cuts, TASS reported on Friday, citing its own sources.
According to the sources, Russia has rejected any offers on additional output cuts during informal consultations in Vienna on Friday. Moscow has long indicated it would back an extension of the current agreement but not new cuts.
Iranian Oil Minister Bijan Zanganeh, whose country is a member of OPEC but is exempted from any curbs, said OPEC was still working with Russia and other non-OPEC states to reach a deal.
OPEC on Thursday agreed to cut its output by an extra 1.5 million barrels per day (bpd) in the second quarter of this year – but only if Russia joins in. If agreed, the production cut could become the deepest one since the 2008 financial crisis.
The oil cartel and its allies also aim to keep existing cuts of 2.1 million bpd, which expire this month, in place until the end of 2020.
Oil demand has been hit hard by the Covid-19 outbreak, with crude prices plummeting 20 percent this year.
The coronavirus outbreak created an “unprecedented situation” with risks “skewed to the downside” and demanding action, OPEC said, in a statement published after its ministers met. It added that it would hold another ministerial meeting on June 9.
Global crude prices plummeted on Friday on the news, with Brent crude trading over five percent lower at $47.55 per barrel, and US benchmark West Texas Intermediate (WTI) falling nearly as much to $43.57.
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