Saudi Arabia may be ready to cut crude oil production to 4 million barrels per day (b / d), but only if April production record of 12.3 million b / d is taken as a reference, said a source familiar with Saudi politics. Reuters Thursday, two hours before the OPEC + group holds a video meeting on the clippings at 10:00 am EDT.
Saudi Arabia may boast an impressive reduction of 4 million bpd, but this drop from a record 12.3 million bpd (still to be achieved in April) would be a much smaller reduction of about 1, 5 million bpd compared to Saudi Arabia’s production level of below 10 million barrels per day in March. If Saudi production expected to drop 12.3 million bpd in April is reduced by 4 million bpd, Saudi Arabia says it will not cut production below 8.3 million bpd.
After the collapse of the previous OPEC + meeting with a “no deal” in early March, Saudi Arabia told the market that it would continue to deliver a record 12.3 million b / d to oil market in the coming months, in accordance with an order from the Ministry of Energy.
After President Donald Trump’s diplomatic push last week and hinting at a massive production cut of at least 10 million bpd, Saudi Arabia rushed to issue a meeting calling statement from OPEC + countries and all other major producers outside the format to discuss ways to support crude oil prices amid falling demand.
After several days of delay, OPEC + is expected to debate today the idea of an overall reduction in collective production. The Saudis and Russia are back at the negotiating table, but they are both signaling, especially Russia, that any cuts should affect “all of the big” oil producers, including the United States.
One of the main issues facing OPEC + today and the G20 energy ministers’ meeting on Friday will be US participation in a coordinated voluntary reduction in production. The other is the good old quarrel over who is willing to cut how much within OPEC and the broader OPEC + group and what level of production to take as a benchmark for cuts.
According to Reuters, Russia believes that the benchmark should be average production from January to March 2020, before the Saudis increase their production to wage war for market share.
By Tsvetana Paraskova for Oilprice.com
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