Oil prices fall as doubts emerge over Russian-Saudi deal

World Grigory Matyunin 05-Apr-2020
Saudi Arabia, Russia
ID 135503965 © Alexei Poselenov | Dreamstime.com

The price of oil has fallen by 12 percent as Russia and Saudi Arabia show little indication of ending the price war.

As a result of reduced demand, caused by the global covid-19 pandemic, and a month-long price war between Russia and Saudi Arabia oil prices had fallen to their lowest level since 2002. Russia rejected Saudi Arabia’s request to reduce production any further provoking the latter to flood the market.

Prospects of a US-brokered deal emerged last week as President Donald Trump suggested the two sides work together to cut production by 15 million barrels per day, resulting in an immediate rise in oil prices. Such a deal would require the cooperation of countries outside OPEC.

Yet a meeting of oil producers has had to be postponed until later this week as Russia and Saudi Arabia continued to exchange accusations over the collapse of previous agreements.

Reuters has reported that Saudi Arabia will postpone the publication of its international crude oil selling prices by five days. Officials from the US and Canada have discussed the possible introduction of tariffs upon Saudi oil to persuade the kingdom to end its price war with Russia. Reportedly President Trump has even considered threatening the withdrawal of military aid which the US currently provides to Saudi Arabia.