Russia, Saudi Arabia 'very close' to oil deal: Moscow's sovereign wealth fund chief

Russian officials insisted Monday they are “very close” to finalizing a deal with Saudi Arabia to cut oil production and halt a price war that’s shaken global markets and driven energy prices to historic lows, even as analysts still warn that the sector could slump further as the coronavirus outbreak crushes demand.

With U.S. energy leaders resisting the idea of cutting domestic production and warning President Trump against extreme measures such as tariffs on foreign fuel imports, all eyes have turned to Russia and Saudi Arabia, two of the world’s largest oil producers, to cut the flow of oil into overstocked markets.

A planned Monday summit of the world top oil producers, which Mr. Trump hailed on Twitter last week, has been pushed back to Thursday amid rising uncertainty that Riyadh and Moscow were ready to cut a deal.

Oil demand already has plummeted by roughly 20 million barrels per day as the coronavirus pandemic has frozen economic activity around the world. Prices have dropped about 60% since the beginning of the year, and there’s growing fear that continued falling prices could deepen the current economic meltdown.

The White House over the weekend put its hopes on the widely anticipated meeting Monday between Russia and the Saudi-led OPEC cartel, where investors hoped a deal could be reached to temporarily slow production and stabilize prices. Even with the four-day delay, top Russian officials expressed optimism that they’d soon cut a deal with Riyadh to cut production and raise prices.

The U.S. energy industry has been devastated by the falling oil prices, sparking economic distress in states key to Mr. Trump’s November reelection hopes.

CEO of the Russian Direct Investment Fund Kirill Dmitriev told CNBC on Monday that “the whole market understands that this deal is important and it will bring … so much important stability to the market, and we are very close.”

Photo: AP - Photo by: Alexei DruzhininRussian President Vladimir Putin addresses Russian citizens on the State Television channels at the Novo-Ogaryovo residence outside Moscow, Russia, Thursday, April 2, 2020. Putin has ordered most Russians to stay off work until the end of the month to curb the spread of the coronavirus. Speaking in a televised address to the nation on Thursday, Putin said he was extending the non-working policy he ordered earlier for this week to remain in force throughout April. The new coronavirus causes mild or moderate symptoms for most people, but for some, especially older adults and people with existing health problems, it can cause more severe illness or death. (Alexei Druzhinin, Sputnik, Kremlin Pool Photo via AP)

Link: https://www.washingtontimes.com/news/2020/apr/6/russia-saudi-arabia-very-close-oil-deal-moscows-so/