Oil Markets Await Crucial Saudi-Russia Talks at OPEC Meeting

Russia and Saudi Arabia meet with other countries Thursday on cutting oil production while they continue a price war that has driven down U.S. gasoline and oil prices, Reuters writes.

Oil rebounded on Wednesday after a two-day fall, lifted by hopes that the meeting between OPEC members and allied producers will calm prices that declined in the wake of the coronavirus pandemic.

Russian Energy Minister Alexander Novak told a local TV station several days ago that the coronavirus crisis is one of the principal causes of what he called the “unprecedented fall of world oil prices.” This, he maintained, “affects the economic interests of the major world nations, including Russia.”

In a round table discussion broadcast on Russian television, President Vladimir Putin suggested that his aim in the current tug-of-war with Saudi Arabia and other major producers, including the United States, was “to cut world production by around 10 million barrels, give or take.”

U.S. President Donald Trump has tried to broker a solution between Russia and Saudi Arabia, which have each increased production to try and intimidate the other. Trump said Sunday that he might consider using tariffs to halt the slide of domestic U.S. oil prices.

“Tariffs are a way of evening the score. Tariffs are a way of just neutralizing. They have tariffs on us and we can now put tariffs on them. Am I using it for oil? It’s something we can (do). Am I doing it now? No,” Trump said.

Saudi oil analyst Abdel Aziz Miqbal told Sky News Arabia that he thought the U.S. will eventually sit down to discuss oil production levels, since the U.S. is “one of the principal parties hurt” by the ongoing price war. Riyadh will also host a virtual meeting Friday with energy ministers from the Group of 20 nations that represent the world’s most powerful economies.

Khattar Abou Diab teaches political science at the University of Paris. He told VOA that he thinks both Russia and Saudi Arabia have reached a stalemate in their game of double-or-nothing and that each side has come out a loser.

He says neither Russia nor the Saudis wants to lose the important Asian oil market. Russia, he thinks, may be trying to hurt U.S. producers as a response to U.S. sanctions prompted by a gas pipeline to Germany. Saudi Arabia, he argues, is trying to defend its interests in a show of force with both Russia and the U.S., after feeling slighted by what the

Saudis considered insufficient solidarity, when its Aramco oil installations were attacked by Yemen’s Houthi rebels in June.

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