Mubasher: Russia rejected OPEC’s proposal to further cut oil output in response to the spread of the new coronavirus (COVID-19), arguing that it was too early to assess the impact, Reuters reported on Friday.
OPEC countries agreed on Thursday to reduce an additional 1.5 million barrels per day (bpd) until 30 June 2020. This would have led to cutting a total of 3.6 million bpd or 3.6% of global supply from the market.
As OPEC offered Moscow an ultimatum to accept a deal for steeper output cuts or no deal at all, Russia will remove all limits on its supply by the end of March.
Russia’s rejection of the proposal “will gravely rupture the budding Russian-Saudi financial and political rapprochement. The result will be higher oil price volatility and geopolitical volatility,” founder of Rapidan Energy Group, Bob McNally, remarked.