It was not immediately clear whether the Trump administration had officially committed to cutting production in the United States, but with prices falling, many companies in the country have already cut production. There is no international mechanism to strictly enforce these production agreements, and fraud is common. The plan of OPEC, Russia and other allied producers in a group called OPEC Plus is to cut 9.7 million barrels a day, or nearly 10 percent of global production, in May and June. The Economist Intelligence Unit expects Saudi Arabia and Russia to reach an agreement to end their price war sooner than expected â€” in the second quarter of this year, said Cailin Birch, a global economist at the EIU. The EIU expected a deal to be reached in the third quarter “once economic and logistical realities have forced [the Saudis and Russians] to contain their manufacturing booms.” All eyes are now on today`s G-20 energy ministers` meeting, which will ask the United States and Canada to help reduce production by an additional 5 million barrels per day. “We expect other producers outside the OPEC Plus club to join the measures that could take place tomorrow during the G20 year,” Kirill Dmitriev, head of Russia`s wealth fund and one of Russia`s top oil negotiators, told Reuters. How has Russia handled its price war with Saudi Arabia? Not good, according to FP columnist Steven A. Cook. He argues that the months-long dispute with Saudi Arabia shows how much Russia has exaggerated its hand in the Middle East. “A likely outcome of this episode will be the end of the idea that Moscow will play an important role in creating a new regional order,” he wrote. The economic slowdown in the world`s major economies currently in lockdown could wipe out 20 million barrels a day of global oil demand, according to analysts at Redburn Energy. “While no form of production deal could hope to offset the 20 million barrels of demand disruption currently caused by Covid-19, on the other hand, it could lead to a faster recovery,” they said. Chad is responding to Boko Haram.
Chadian armed forces say they killed 1,000 Boko Haram fighters during a 10-day operation in the west of the country. The operation was launched in retaliation for a Boko Haram attack on 23 May. He killed nearly 100 Chadian soldiers, the Islamist group`s deadliest attack to date. “Our men occupied two bases on Boko Haram island and were also stationed on the shores of Lake Chad in Niger and Nigeria. They will keep their positions until the arrival of troops from these countries,” a spokesman said. It is possible that oil prices will fall again in the coming days if traders are not satisfied with the further cuts. In fact, the price fell sharply on Thursday, the last day oil futures were traded, even though a deal was close. The deal includes a reduction of 5 million barrels per day between Saudi Arabia and Russia, with the remaining 5 million barrels being made by the other OPEC countries, the Financial Times reported.
The reductions will expire gradually by April 2022. Many analysts expect a production cut deal to involve the United States. According to his spokesman, Energy Minister Dan Brouillette will attend the G20 meeting “to discuss with his counterparts around the world the urgent need to restore calm to global energy markets.” Major oil-producing countries that are not members of OPEC Plus, such as Canada, Brazil and Norway, as well as the United States, have reduced production. The Department of Energy said U.S. oil production would fall by at least two million barrels a day by the end of the year. .