In order to support crude prices, OPEC+, which brings together the 14 members of the Organization of the Petroleum Exporting Countries (OPEC) and 10 other oil-producing countries, including Russia, will discuss a possible reduction in oil production of up to 10 million barrels per day (bpd), news agency Reuters reported on Friday 3 April.
This option is particularly desired by the American President, Donald Trump, after the fall in oil prices.
As a matter of fact, on Monday 30 March the price of a barrel had reached its lowest level in 17 years, falling below 20 dollars in the United States. The cause: the sharp drop in demand linked to the COVID-19 pandemic and the price war between Russia and Saudi Arabia after Moscow rejected the Riyadh and OPEC proposal to cut oil production.
Over the weekend, the price of black gold nevertheless started to rise again after a tweet from the American president, posted on Thursday, in which he stated that he expects the rapid conclusion of an agreement between Moscow and Riyadh on a reduction in production of 10 to 15 million barrels per day. Nevertheless, the price per barrel remained very low, hovering around 34 dollars on Friday 3 April, at the time we went to press.
The IEA is concerned. In an article published on 1 April, the International Energy Agency (IEA) expressed its concern about the current situation and the consequences for the energy sector.
The oil industry is experiencing “a shock like no other in its history”, the effects of which “will be felt throughout oil’s global supply chains and ripple into other parts of the energy sector”, the article said.
According to the Agency, the scale of the collapse in oil demand, in particular, far exceeds the oil industry's capacity to adapt.
To read the IEA article: https://bit.ly/2R7OfJ7 (Original version in French by Damien Genicot)