Russian President Vladimir Putin considers it possible to reduce world oil production by 10 million barrels per day, if this happens as part of a partnership. He stated this at a meeting on the situation in global energy markets.

The head of state recalled that the decline in oil prices was triggered by the coronavirus epidemic, which affected almost the entire world economy, which led to a drop in energy demand, as well as the withdrawal of Saudi Arabia from the OPEC + deal.

Putin noted that when demand begins to grow, the industry may face an acute shortage of oil “with all the negative consequences for the global economy,” and it is in the general interest to avoid such a scenario.

The head of state added that Russia feels comfortable at a price of $ 42 per barrel of oil: the country's budget has been drawn up taking into account this very figure - therefore, Moscow has never wanted either too high or too low prices.

“Russia considers it necessary to combine efforts. We were not the initiators of the OPEC + deal break. And we are ready for agreements with partners and within the framework of this mechanism - OPEC + - and are ready to cooperate with the United States on this issue. I believe that it is necessary to combine efforts in order to balance the market and reduce production as a result of these coordinated efforts, coordinated actions, ”Putin said.

He added that "we can talk about a reduction from the level of production that prevailed before the crisis, that is, we are talking about the level of production in the first quarter of this year."

The head of the Ministry of Energy, Alexander Novak, during the meeting noted that in order to achieve stability in the oil industry, the active participation of all major producers, including Russia, Saudi Arabia, the United States of America and other countries that are both non-OPEC members, is necessary.

The Minister noted that oil producers should agree to reduce production volumes and stabilize the situation in order to prevent collapse in the markets.

  • © Sputnik / Alexei Druzhinin / Kremlin via REUTERS

Significant reduction in oil requires the contribution of all major producers, especially Americans, Igor Yushkov, a leading expert of the National Energy Security Fund, said in a conversation with RT. He recalled that the United States was comfortable when prices were above $ 50 per barrel - and they increased production.

“The point is that it is possible to return to the OPEC + agreement, but it should include the United States as well. If we take them into account, then it is possible for everyone to reduce so that world production falls by $ 10 million barrels per day. In the old format, such a reduction in production is unlikely, ”the expert noted.

Without the United States, such an agreement would not make sense, said Sergei Pikin, director of the Energy Development Fund.

“Trump replied that the United States is not obliged to reduce production and that Saudi Arabia and Russia should do this first of all, because their task is to balance the world. And the United States somehow "stand by." In this interpretation, an agreement is unlikely to be reached. If other countries do not join, we will not achieve any result again, ”he said.

On April 1, the transaction between OPEC countries and 11 states outside the cartel, including Russia, was terminated. For the first time, they agreed to synchronously limit oil production in 2016. This decision was made to restore the balance of supply and demand, as well as to keep oil prices from significant fluctuations.

The last time the deal was extended in December 2019. The parties agreed to reduce oil production from January 1 to March 31, 2020 by 1.7 million barrels per day relative to the level of October 2018. However, since the beginning of 2020, the spread of the coronavirus infection COVID-19 has had a significant impact on the oil market, which has led to a decrease in the consumption of raw materials and its cheapening.

In this regard, on March 6, an OPEC + meeting was held in Vienna, at which the parties were unable to come to an agreement and decided to completely abandon all previously accepted obligations.

After that, Saudi Arabia announced plans to increase oil production to 12 million barrels per day, while providing the largest discount for its products in 20 years.

Recall, US President Donald Trump said earlier that Russia and Saudi Arabia reached an agreement on oil prices in the next few days.

He also expressed the hope that Moscow and Riyadh will reduce oil production by 10 million barrels or more.