OPEC's Epic Fail Will Hurt All Oil Producers, Even Russia - Bloomberg

OPEC's Epic Fail Will Hurt All Oil Producers, Even Russia - Bloomberg:

Friday’s gathering of oil ministers from the Organization of the Petroleum Exporting Countries and their international allies broke up in disarray. The collapse of talks reveals deep divisions over how to deal with the slump in oil demand triggered by the spread of the Covid-19 virus.

Saudi Arabia demanded that Russia share in a proposed reduction of a further 1.5 million barrels a day, insisting that OPEC wouldn’t reduce supply without the support of non-members. Russia demurred. Maybe Vladimir Putin just didn't like being told what to do by a 34-year-old prince who's run his country for about as many months and his older brother who's been energy minister for just half a year. 


What’s become clear is that by making any OPEC output cut dependent on the participation of non-OPEC allies, the group effectively cemented Russia’s full control over the whole process of supply management, as I warned more than a year ago. This isn’t the first time OPEC+, which controls almost half of the world’s oil production, has been an uneasy partnership, but it is by far the most damaging. The partnership remains on life-support.

But this meeting was not just about making a further output cut. It was also meant to ratify an extension of the current agreement between the 20 nations to remove as much as 2.1 million barrels a day of oil from the market. That deal, reached in December, expires at the end of this month, leaving members free to pump as much as they wish from April 1.