“Initially, this whole story begins in February, when the coronavirus broke out in China. They closed many, many enterprises and, accordingly, began to consume less hydrocarbons, and demand, in fact, fell on a global scale, prices fell. And then the Saudis raised the question: let’s lower the production volume - by 1.5 million barrels per day - in the framework of the OPEC + agreement, and thus support prices, ”he said.
Yushkov said that it was important for Saudi Arabia because "they are making up their budget of about $ 72 per barrel."
“While the Russian budget is made up of $ 42.4. Therefore, it suited us, ”he added.
According to the expert, in this situation, Saudi Arabia has set conditions.
“They demanded: either we reduce the volume of production together - OPEC +, or there will be no deal at all. Russia offered to do nothing, to remain at the level of production in the first quarter. And as the coronavirus arrived, lowered prices, so China will fight it and, accordingly, restore consumption, and this raises prices ... Therefore, our proposal was: not to reduce anything, just wait, maybe the price will drop a little. Here we had $ 70 in January, it may fall to $ 55, at this level we will normally live this period, and then China will restore demand. The Saudis set an ultimatum, ”said the expert.
In his opinion, in this situation Russia “was with a rather constructive proposal” - to leave it as it is.
“And I’m ready, I think, to bargain about the volume of decline,” he said.
On March 9, oil prices fell by 30% amid the collapse of the OPEC + deal.
In early March, OPEC decided to adjust the recommendation under the OPEC + agreement, proposing to further reduce oil production by 1.5 million barrels per day until the end of 2020, and not only in the second quarter.
At the March 6 meeting, the OPEC + countries were unable to agree on either an additional reduction or an extension of the transaction under current conditions.