According to the analysts, the oil deal between Saudi Arabia and Russia looks unstable insubstantial than ever before.
The previous year, OPEC countries along with producers outside of OPEC majorly led by Russia reached an agreement to cut the supply of oil by 1.2 million barrels per day.
The agreement was named as OPEC+. As per the agreement, Saudi Arabia also agreed that it will bear the bulk of the load for the cut and will reduce its crude oil production to the capacity of 400,000 barrels per day to 9.8 million b/d in March.
So, if this objective will be achieved, this would generally mean that Saudi Arabia alone has amounted to 70 percent of the entire OPEC+ target.
However, in return, Russia was supposed to be responsible for a greater share of oil cuts for non-OPEC nations between the period of October and February 2019. But, the country during this period had only been decreasing production by only 47000 barrels per day which is significantly less than promised.
Owing to the slow pace of oil production reduction, the Russia producers have been criticized by the Energy Minister of Saudi Arabia Khalid al-Falih. The Energy Minister told the CNBC in January that, Moscow had moved “slower than I’d like.”
Responding to the criticism by the Saudi Arabia’s Foreign Minister, Russian Energy Minister Alexander Novak released a statement and said that till the beginning of February, Russia was fully committed to the pact and had been fulfilling its obligations in the best possible way and in line with the pact to subsequently drop production by the end of May 2019.
During the year 2018, due to the increase in shale supply by the U.S and uncertainty over global demand, prices were reduced. President Donald Trump over some time criticized OPEC regularly over its policies as well as decision making and claimed that prices of oil should be lower.