OPEC+: Russia's Response to Oil Output Cuts Tests Saudi Arabia - Bloomberg

OPEC+: Russia's Response to Oil Output Cuts Tests Saudi Arabia - Bloomberg:

Revenge, they say, is a dish best served cold.

That seems to be the view of the Russian government, as it contemplates how to respond to pleas that it join Saudi Arabia and other OPEC members in cutting oil production. Many expect the coronavirus outbreak to trigger a demand slump.

Talks between Russia and the Organization of Petroleum Exporting Countries have dragged on all week in Vienna as Moscow has resisted signing on to output reductions, delegates told Bloomberg News. With the market already looking well-supplied, OPEC's technical experts are said to have recommended a cut of 600,000 barrels a day — considerably deeper than internal analysis that the virus will reduce demand by around 400,000 daily barrels for about six months.

Russia has its own immediate reasons for standing pat. The country’s oil output last year hit its highest level since the days of the Soviet Union, reaching around 11.25 million barrels a day. What’s more, it’s now in a situation that historically only Saudi Arabia and a few other Gulf countries have enjoyed, with spare capacity on hand — in the region of 500,000 barrels at day, enough to give it a role as a swing producer for the wo