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On April 2, the President of the United States, Donald Trump, threatened the Crown Prince of Saudi Arabia, Mohammed Ibn Salman, with the cessation of military assistance if he did not stop the price war in the oil market. This was reported by Reuters sources.
The President of the United States, Donald Trump, forced Saudi Arabia to end the price war with Russia in the oil market with an ultimatum. This was reported with reference to four sources on April 30 by Reuters.
On April 2, the US president told Crown Prince Mohammed Ibn Salman that he would withdraw troops from the kingdom if Saudi Arabia did not begin to cut oil production and did not appeal to OPEC countries, the agency said.
Trump gave the prince 10 days to announce a reduction in production, vowing otherwise not to hamper Congress’s initiative to cut military aid to Riyadh. Muhammad was so overwhelmed by the threat that he ordered his aides to leave the room in order to continue the discussion in private, an informed source told the agency.
The interlocutors considered Trump’s actions as an attempt at all costs to protect the US oil industry. USA From the historical fall in oil prices in the context of the coronavirus pandemic.
On April 29, a Reuters correspondent asked the White House chief if the threat to withdraw troops was mentioned in negotiations with the Crown Prince. Trump replied that he did not need to say anything to Muhammad ibn Salman. Russian Prince and President Vladimir Putin acted “very wisely” to solve their problem, the US president said.
OPEC + announced on April 10 an agreement to reduce the level of world oil production by 15%. The deal was finalized on April 12. An agreement was reached one month after the cancellation of the previous transaction, causing a record drop in raw material prices. By March 9, the price of Brent oil fell 30% to $ 33 a barrel, which was the highest daily drop since 1991, when the Gulf War began. On March 30, the Brent price fell below $ 23 a barrel.
In the context of failed negotiations, Saudi Arabia, blaming Russia for breaking the agreement, decided to “enter a total price war” and increase production from 9 million to 12 million barrels per day. In addition, Riyadh squeezed Russian oil from the Urals from the European market, offering to triple its own Arab light supply at deep discounts. This led to the fact that by March 31, the cost of the Urals fell to a minimum since 1999: $ 13 per barrel. As Radio Liberty pointed out, the Urals in Europe have become cheaper than fuel.
Starting on April 1, oil prices began to rise amid expectations that Russia and Saudi Arabia would cut production. On April 2, Trump announced preliminary agreements with major oil producers to cut production by 10-15 million barrels per day. In this context, Brent crude oil increased 16.3% to $ 34.83 per barrel.
However, the negotiations stalled due to a public skirmish between the Russian and Saudi Arabian authorities over the reasons for ending the previous OPEC + deal. Putin then expressed the opinion that Riyadh has withdrawn from the agreement to eliminate competitors that produce oil from shale. The Kingdom’s Foreign Minister, Prince Faisal bin Farhan Al Saud, called the words of the President of the Russian Federation “completely devoid of truth”.
April 20, the price of US WTI futures for the first time in history turned negative. According to the agency Reuters, prices fell to less than $ 40 per barrel.
By April 30, oil prices recovered to the level before the record drop.
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