Saudi Arabia alleges that the Kremlin lie, speaking about the reasons of cancellation of the agreement “OPEC plus”. On 3 April, said the Minister of foreign Affairs of the Kingdom, Prince Faisal bin Farhan al Saud, writes Agency SPA.
The President of Russia Vladimir Putin on 3 April expressed the view that Riyadh is out of the transaction to eliminate competitors. “This, apparently, is connected with the attempts of our partners from Saudi Arabia to get rid of competitors, which extract so-called shale oil. In order to do this, the price should be below $40 per barrel. And in this sense they are, of course, your goal is to a certain extent succeed”, – quotes Putin’s Kremlin website.
The Prince called the President’s words “completely devoid of truth”. The position of Riyadh in respect of shale oil is well known: it is an important component of energy sources on the planet, he said. According to him, Saudi Arabia wants to reduce production and balance on the market that meets the interests of producers of shale oil.
Farhan al Saud added that Russia, not the country, initiated severance agreement “OPEC plus”. He urged the Kremlin to take “the right decision” at an emergency meeting of the countries-oil producers on April 6th.
The fall in oil prices continues since the beginning of March. The main reason was that Russia and the Organization of countries – exporters of oil are unable to agree on new restrictions the level of oil production. By 9 March the price of Brent crude oil has fallen by 30% – up to $33 per barrel, the biggest daily drop since 1991, when the war began in the Persian Gulf. The evening of 18 March, the cost of Brent crude slumped to a 17-year low – $25,4 per barrel and 30 March futures traded at $18.
On the background of unsuccessful negotiations Saudi Arabia, according to sources Bloomberg, decided to “join the total price war” and increase production from 9 million to 12 million barrels per day. In addition, Riyadh has pushed Russian oil Urals on the European market, offering triple the supply of Arab Light grade with big discounts.
This led to the fact that, as of 31 March, the price of Urals dropped to the lowest level since 1999 – $13 per barrel. As noted by “Radio Liberty”, the Urals in Europe became cheaper fuel.
1 APR prices on the oil market began to rise amid expectationsthat Russia and Saudi Arabia will reduce production volumes. Putin on 3 April said that Russia is ready to cooperate with the countries of the “OPEC plus” and the United States.