End of coordinated production cut of crude oil in oil-producing countries
OPEC: The cooperative reduction of crude oil production that has been continued by the Organization of Petroleum Exporting Countries and Russia has been discontinued on March 31, and major oil-producing countries are planning to increase production one after another. As demand for crude oil has dropped sharply due to the worldwide spread of the new coronavirus, coordination among major oil-producing countries has been difficult, and it is expected that an oversupply of crude oil will continue for the time being.
OPEC and oil-producing countries such as Russia have been working together for more than three years to cut production volume in order to support crude oil prices. Talks broke down and cooperative cuts were cut off on the 31st.
Already in the New York market, crude oil futures prices have been at record lows, temporarily dropping below $ 20 per barrel for the first time in 18 years, but Saudi Arabia and Russia are planning to increase production in the future.
In response to this, other oil-producing nations have called for a breakthrough, and the world's largest oil-producing nation, U.S.-based President Trump, who has not yet joined the framework for coordinated production cuts, said Russia's President Putin last month. He talked over the phone and expressed his willingness to cooperate to stabilize oil prices.
However, it is expected that the oversupply of crude oil will continue for the foreseeable future due to difficulties in coordination between Saudi Arabia and Russia, the key players.