The Coronavirus epidemic has virtually brought the world to a halt. However, it has not been able to dent the deep manipulations over oil. The most recent one was witnessed during the OPEC+ meeting, which saw divergent approaches of the cartel of Saudi led oil producing countries and their cohabitation with another major oil producing partner–Russia.
So far, the agreement to stabilise price and production has been held well since 2016 by OPEC+ countries. However, given the adverse impact of Coronavirus on major hydrocarbons consuming economies like China and India, the demand for petroleum products has reduced. The Saudis, in turn, wanted to reduce their production to maintain price stability.
But the production cuts i.e. additional cuts of 1.5 mbpd was unacceptable to Russians. The oil producing countries have had their own self-inflicted problems, with declining prices and budgetary calculations coming under stress, which they could ill afford.
This is further accentuated by their armed interventions, proxy wars, misadventures and regional competition – from Yemen to Lebanon – that bled their economies. Therefore, they wanted to keep oil production at lower levels to hold the prices steady.
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