US, Russia Agree to Hold Oil Talks
US president Donald Trump and his Russian counterpart Vladimir Putin agreed during a phone call on March 30 to have their top energy officials discuss the situation in the oil market, according to a message on the Kremlin's website.
"Opinions on the current state of the global oil markets were exchanged. It was agreed there would be Russo-American consultations about this through the energy ministers," the Kremlin said.
Russia, Saudi Arabia and other Opec+ producers are preparing to ramp up production next month once previously agreed supply quotas expire, at a time when fuel demand is plummeting as a result of coronavirus (Covid-19) lockdowns. Oslo-based Rystad estimated in a recent research note that global oil demand would slump by 16mn b/d in April because of efforts to slow the virus' spread.
Talks on extending and potentially deepening Opec+ cuts broke down earlier this month, and Moscow has signalled before that it wants to see more countries participating in the supply pact before it considers rejoining. However, the very notion of producers meeting to fix prices would be unacceptable in OECD countries. Washington, which in the past has welcomed low oil prices as good for motorists, is now concerned about their impact on the highly leveraged US shale industry.
Brent crude was up almost 3% by 11:30 GMT at $23.44/b, while West Texas Intermediate has risen nearly 5.6% to $21.2/b. Both benchmarks slumped on March 30, after hopes were dashed that Russia and Saudi Arabia would be able to strike a deal to avert the impending supply war.