Led by Saudi Arabia, other OPEC producers and Russia were considering an emergency meeting to cut production in response to the impact of the coronavirus, but it’s not now clear whether that will happen.
A committee advising the producers met for three days in Vienna and on Thursday recommended a 600,000 barrel a day reduction in production to bring relief to the oil market, according to reports. The Joint Technical Committee, made up of representatives of producing countries, is not a decision making entity, and it only makes recommendations to the ministers of OPEC countries and its allies, including Russia.
However, Russian Energy Minister Alexander Novak said time is needed to weigh any impact on the oil market from the virus, which has led to a steep decline in energy demand due to a massive shutdown of transportation within China and elsewhere.
Two-thirds of China’s crude imports come from OPEC and Russia.
Earlier this week Iraq’s oil ministry spokesman Assem Jihad said any cuts would have to be announced at the OPEC ministerial meeting which may be moved from March to February.
Russia exported 77.6 million tons of oil to China in 2019, more than the previous year but second to Saudi Arabia.
OPEC and Russia in December agreed to cut production by 500,000 barrels per day in 2020, lowering output from October 2018 levels by 1.7 million barrels per day.