“the Epidemic of the coronavirus has affected almost the entire global economy, leading to a sharp drop and “compression” of demand especially from the main consumers of energy and transport, industry, some other industries,” – said the head of state. “Everything can turn into a high technological and even environmental risks,” he said. But the demand will inevitably begin to recover, and the industry could face an acute shortage of oil, predicted the President. “Because prices can fly up,” – explained he said that in the General interest to avoid such a scenario.
will the oil exporters to agree on production cuts
In early March, Russia has offered to extend the deal “OPEC-plus”. “We have never sought to ensure that the prices were too high and wanted to avoid a situation when prices were too low,” said Putin, Recalling that the budget is based $ 42 per barrel, “and around that number we feel quite comfortable”.
All countries have an interest in a joint concerted action for long-term stability of the market
“We are in close contact with our partners in Saudi Arabia. I recently had a conversation with the President of the United States” – continued the head of state and added that everyone is interested in a joint concerted action for long-term stability of the market. “Russia considers it necessary to unite efforts” – said the President, underlining that Moscow was not the initiator of cancellation of the transaction “OPEC-plus”. And ready to the agreements in the framework of this mechanism, and to cooperate with the United States. “According to preliminary estimates, I think, that speech can go about decrease in the volume of around 10 million barrels per day, a little less, maybe a little more,” called the figure of the President. “Of course, all of this should occur in a partner,” he added. And this reduction of the level of production prevailing before the crisis level of the first quarter, Putin said.
In the state Duma has predicted the end of oil crisis
“Our key task is long-term market stability in the interests of both producers and consumers”, – he stressed. And of course, the sustainability and development of the Russian fuel and Energy complex.
energy Minister Alexander Novak called the factors that most affect the market. The first and most important pandemic and coronavirus measures to limit its spread, which led to a sharp decline in economic activity and limitation of mobility of citizens, a drop in demand for oil and oil products. The market there is no understanding where can be the bottom, Novak continued: “This sudden and massive decline in demand was not never.”
an Additional factor was the decision of individual countries to secularity market, the Minister continued. Russia proposed to extend the restrictions in production countries “OPEC-plus” at least a quarter or a month. But with the partners from Saudi Arabia actually withdrew from the agreement and announced a significant additional discounts on their oil, as well as plans for a sharp increase in production, stated Novak.
To restore stability in the industry need to make a decision on coordinated action for the reduction of production volumes, said the head of Ministry. “Production must be reduced over the next several months with a subsequent increase in the level of production as the recovery of the world economy,” he said, and announced plans to hold a conference call of Ministers “OPEC-plus.”
In the US went bankrupt producing shale oil company
after Hearing the report, the President stated: “first, the causes of the decline in prices and production associated primarily with the coronavirus, and caused by in this regard, reduced production, lower demand”. The second reason for the price fall – out Saudi Arabia from the transaction “OPEC-plus”, the increase in production and the announcement of willingness to provide discounts on oil. All this, apparently, is connected with the attempts of the partners from Saudi Arabia to get rid of competitors that produce “shale oil,” Putin said. In order to do this, the price should be below $ 40 per barrel. But such a goal never before itself did not put. Only taking into account the interests of all partners, to ensure a fair agreement on the balancing market, he says. Putin asked Novak when negotiating with colleagues to seek a balanced solution.