Graphic shows oil producers pumping more than 1 million barrels of oil per day.
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BUSINESS

Can Saudi Arabia save global oil industry

By Duncan Mil

April 6, 2020 - Saudi Arabia and Russia are pressing the U.S. to strike a deal to cut crude supply worldwide by at least 10 million barrels per day in an attempt to stabilize prices as the Covid-19 pandemic pummels demand.

OPEC+ -- the Saudi-led Organization of the Petroleum Exporting Countries -- will convene a teleconference on April 9, in a bid to negotiate a truce in a Saudi-Russia fight for market share that has brought crude prices down by as much as 60 per cent since January.

U.S. President Donald Trump has said he will slap tariffs on crude imports if he needs to protect U.S. energy workers from the oil price crash.

Saudi Arabia has delayed pricing its crude for May delivery as it awaits the result of the conference, indicating that Crown Prince Mohammed bin Salman (MbS) is not willing to flood the market with cheap supplies before an agreement.

Alongside the U.S. and the OPEC+ producers, MbS could demand all countries that pump more than one million barrels a day take a hit. In essence, this would include Canada, China, Brazil, Qatar, Norway and the United Kingdom. Otherwise, Saudi Arabia could continue to pump 12.3 million barrels a day, which would result in prices collapsing to single figures, hitting the U.S. shale oil industry that has been a thorn in the sides of both Saudi Arabia and Russia for the past six years.

PUBLISHED: 06/04/2020; STORY: Graphic News; PICTURES: Getty Images
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