A meeting of the main oil-producing countries, scheduled for Thursday 9 April at 2 p.m. GMT, should pave the way for a "fair agreement which will restore the balance of the oil markets", according to the Saudi authorities, organizers of the meeting at the request of the US President Donald Trump.

"The only hope for the market to avoid a total collapse in prices and a halt in production" in some sites, this exceptional conference promises to be crucial, according to Bjornar Tonhaugen, an official at Rystad Energy.

Members of the Organization of the Petroleum Exporting Countries (OPEC) and other participants, including their partners through the Opep + agreement, will discuss a massive reduction in world crude production, their main weapon in the face of the fall in the world demand for black gold.

Russia ready to cooperate

Russia, at the heart of negotiations as the second world producer and leader of the cartel partners, this time seems ready to cooperate, unlike the previous meeting in early March which ended in a fiasco and ended on a price war.

The objective of a common cut of 10 million barrels per day (mbd) - or 10% of world production - mentioned by Donald Trump on Twitter last Thursday, seems to be consensus but its sharing between countries looks tricky.

Saudi Arabia and Russia "have been extremely clear" that they will cut production "only if other major oil producers join them," notes Bjarne Schieldrop, analyst at Seb.

The United States, the world's largest producers, is pushing for an agreement to give fresh air to its shale oil industry, which is in serious difficulty at current price levels.

But "it is not because such an agreement is in everyone's interest that it will necessarily be found," warns Craig Erlam, analyst at Oanda. Unlike others, Washington cannot force producers in its own country because competition rules prevent companies from coordinating. And the spat between Riyadh and Moscow are frequent, the last one this weekend having moreover caused the delay of this meeting initially planned for Monday.

Exceptional conference

The conference, set up in record time, is exceptional in more ways than one. First, the invitation was sent far beyond the usual circle because no less than 10 countries outside Opep +, including the United States, were invited, according to the Russian agency Tass.

It then comes at a time when the world oil industry is going through "a shock unprecedented in its history", the International Energy Agency said on Monday.

Drastic measures to restrict the movement of goods and people to stem the Covid-19 pandemic have caused an unprecedented situation and should lead to a crude oil surplus on the market which could reach 25 mbd in April, according to Rystad Energy.

Faced with this abysmal deficit in demand, the two benchmark prices, a barrel of European Brent and American WTI, touched more seen levels last week since 2002 and ended the worst quarter in their history.

Finally, due to health crisis, the conference will be held remotely and not at the headquarters of the cartel in Vienna as usual. It will also be followed the day after a second on the same theme, this time by the G20 Energy Ministers, still on the initiative of Riyadh.

With AFP

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