OPEC+ set to hold urgent meeting to stabilize oil market

The members of the Organization of the Petroleum Exporting Countries (OPEC) and major oil producers are set to hold their first meeting after the collapse of the previous deal, non-OPEC member Azerbaijan has announced.

During the talks, which are set to be held on Monday via video conference, the participants will discuss the situation in the oil market and the new declaration of cooperation, Azerbaijan’s Ministry of Energy said in a statement on Friday. It added that the meeting will be held on the invitation of the de facto leader of the oil alliance, Saudi Arabia, which called for an urgent meeting “to try and reach a fair deal to restore balance to the oil market” a day earlier. 

The kingdom’s move followed a phone call between US President Donald Trump and Saudi Crown Prince Mohammed bin Salman. Trump later said that he “hopes” Moscow and Riyadh are on the way to new oil output cuts of 10 million to 15 million barrels (but failed to specify over which period). The US leader cited talks between the crown prince and Russian President Vladimir Putin, but the Kremlin did not confirm the cuts.

While Trump hailed the potential agreement between Russia and Saudi Arabia, he did not indicate that the US would reduce its own production of oil. While the US has historically refused to support OPEC measures to boost the market, low crude prices are harmful for US shale producers and could lead to the collapse of the bulk of the shale companies.

The previous OPEC+ accord expired on April 1, allowing the former signatories to boost production, eventually sending oil prices in a tailspin. The output cut pact that was in place since 2017 collapsed as Russia and Saudi Arabia failed to agree on new terms on March 6. Riyadh insisted on deeper curbs, and Russia wanted to keep them at the existing level. Failure to reach a deal triggered an ‘oil price war’ after Saudi Arabia threatened to boost production. The move sent crude prices to multi-decade lows.

The positive news on talks and possible curbs sent oil prices higher on Friday, with Brent trading at over $31 per barrel and WTI nearing $26 a barrel.

For more stories on economy & finance visit RT's business section