From Vladimir Soldatkin, Alex Lawler and Rania El Gamal
MOSCOW / LONDON / DUBAI (Reuters) – Major oil producing countries pushed for the finishing touches on a sweeping oil cut deal in the G20 talks on Friday aimed at raising prices collapsed by the Corona virus crisis as Russia and Saudi Arabia shoulder the lion’s share, while the United States has shown Ready to help.
Riyadh, Moscow and their allies, who together make up the unofficial OPEC + group, reached an agreement to curb crude production equivalent to 10 percent of global supply in lengthy talks on Thursday and said they wanted the others to cut another five percent.
But efforts to conclude the agreement faced an obstacle when Mexico insisted that it would cut production only by a quarter of the amount demanded by OPEC +, although the Mexican President said that Washington had offered to make additional cuts on its part.
US President Donald Trump, who has threatened Saudi Arabia with oil tariffs unless it addresses the oversupply in the market, said the United States is ready to help Mexico by compensating “some shortfall,” adding that Washington expects compensation.
Oil markets were closed on Friday at a time when the G20 energy ministers held a videoconference arranged by Saudi Arabia, but prices did not rise after Thursday’s cut talks – which will be the largest in history – as reducing global supplies by 15 percent will not distract the oil glut. Much at a time when demand is falling 30 percent.
Corona measures to stem the fuel demand for planes and cars have been depleted, putting pressure on the budgets of oil producing countries and ravaging the US shale oil industry most affected by the price drop because of its higher costs.
“We call on all countries to harness the various tools at their disposal to help reduce the surplus,” US Energy Secretary Dan Browell told the G20 talks.
The OPEC + agreement, conditional on Mexico’s accession, includes withholding ten million barrels per day, and sources in OPEC + say that an additional five million barrels per day should come from reducing the production of the United States and others.
Norway and Canada, both outside OPEC +, have indicated that they may cut production if an agreement is implemented.
Bruillett said that US production could drop by two to three million barrels per day by the end of 2020. Although it is not an official cut, it is larger and over a shorter period of time than US officials indicated previously.
Kremlin spokesman Dimitri Peskov said a move involving others was “inevitable”, despite his admission that US law prohibits US producers from joining a bloc aimed at guiding prices.
Trump and Russian President Vladimir Putin held talks on Friday on the energy market.
(Covered by Olesya Astakhova in Moscow, Ahmed Ghaddar, Alex Lawler, Shadia Nasrallah in London, Florence Tan in Singapore, Mariana Baraga in Mexico City, Jeff Mason and John