NEW YORK: OPEC and its allies failed to reach a deal on oil production cuts Friday, after Moscow refused to tighten supply to counter the effects of the coronavirus outbreak, sending oil prices tumbling.
The day before, OPEC ministers, led by Saudi Arabia, had recommended reducing output by 1.5 million barrels per day in the face of the global slowdown caused by the epidemic and the resulting fall in demand for oil.
But the decision hinged on agreement from the so-called OPEC+ grouping — Russia, the world´s second largest oil producer, foremost among them.
Following hours of discussions, Russian Energy Minister Alexander Novak said that the talks between OPEC and OPEC+ had failed to bring about a deal.
“Regarding cuts in production, given today’s decision, from April 1, no one — neither OPEC countries nor OPEC+ countries — are obliged to lower production,” he told reporters after the meeting.
Most other ministers, including Saudi Arabia’s, left the meeting at the Vienna-based headquarters of the Organisation of Petroleum Exporting Countries stone-faced without comments.
Oil prices, which have already tumbled to lows not seen since mid-2017 because of the coronavirus, fell further. As news of the “no deal” result reached the markets, Brent Crude fell 9 percent to $45.28 around 1630GMT, while US oil prices later fell 10.1 percent to end at $41.28.
“Today´s outcome is a psychological blow for the market, as the steep plunge in oil prices shows,” analyst Ann-Louise Hittle of Wood Mackenzie said.