The United States pushed back OPEC+ call to participate in big oil production cuts. Previously, major oil producers such as Saudi Arabia and Russia signaled that they would agree on deep supply cuts only if the US and other non-alliance producers joined the effort to support the oil prices which have been hammered by the COVID-19 pandemic.
However, the US Department of Energy on Tuesday said that the US government had no intention to intervene in the private markets. The department also cited EIA’s data indicating projected cuts of 2 million bpd although the decline would take place slowly, over the next two years.
Under normal conditions, boosting oil prices through coordinated production cuts will violate US antitrust laws. However, analysts said it could be legal if the federal government or state regulators intervened by setting lower production levels.
OPEC+ will hold a teleconference meeting on Thursday at 1400 GMT after President Trump tweeted that Saudi Arabia and Russia had agreed to cut production by 10 million to 15 million bpd. Saudi Arabia will then host a video conference on Friday for G20 energy ministers to discuss the impact of the pandemic on the energy market.
Sources said that Riyadh and Moscow had not reached a consensus on the baseline for any output cuts. Russian TASS news agency reported that the output reduction would likely last until May.
