OPEC Countries May Increase Market Share after Collapse of Deal with the RF
The Vienna Pact, which helped maintain price stability for three years, was one of the first “victims” of the coronavirus. There was no point in reducing production in the conditions of catastrophically narrowing demand, but after flooding the market with cheap oil, you can try to change the balance of power, experts explain.
The largest agreement in the history of oil exporting countries began in 2016, when Russia, the largest oil producer in the world at that time, agreed to cooperate with OPEC for long negotiations. The pricing situation in early 2016, when Brent quotes fell to $ 28 per barrel, did not suit anyone. Moscow and Riyadh were then able to agree not only on a voluntary reduction in production, but also to attract a dozen more manufacturing countries outside the OPEC to the deal.
Since 2017, when the agreement on reduction of production worked, the price of oil was mainly in the range of $ 50-70 per barrel. For the Russian budget, the deal allowed an additional 10 trillion rubles to be earned, said Energy Minister Alexander Novak.