Saudi Arabia delays oil price decision until after Thursday’s OPEC+ meet: Source

A view shows branded oil tanks at Saudi Aramco oil facility in Abqaiq, Saudi Arabia. (File photo: Reuters)

Saudi Aramco will delay the release of its crude official selling prices (OSP) for May until April 10 to wait for the outcome of a meeting between OPEC and its allies regarding possible output cuts, a senior Saudi source familiar with the matter said on Sunday.

“It is an unprecedented measure that has not been taken by Aramco before. May OSPs will depend on how the OPEC+ meeting concludes. We are doing what we can to make it successful, including taking this extraordinary step to delay the OSPs,” the Saudi source said.

Saudi Aramco typically issues its OSPs by the fifth of each month, setting the trend for Iranian, Kuwaiti and Iraqi prices and affecting more than 12 million barrels of oil per day bound for Asia.

OPEC and allies are due to meet on Thursday to discuss a possible new global crude supply cut to end a price war between Saudi Arabia and Russia which has prompted US President Donald Trump to intervene.

The OPEC+ meeting was initially due to take place on Monday, but was postponed to April 9 "to allow for more time to reach out to all producers, including OPEC+ and others", the source said.

The source said that Riyadh wants to avoid a repeat of the outcome of a March meeting where oil talks collapsed due to Russia's refusal to cut output.

Russian President Vladimir Putin blamed the crash in prices on Saudi Arabia on Friday, prompting a firm response from Riyadh the following day disputing Putin's claims.

On Sunday, Kremlin spokesman Dmitry Peskov said Russia wants constructive talks on the situation in the oil market and sees
no alternative to dialogue, Interfax news agency reported.

"Russia was not in favour of terminating the OPEC+ deal. President (Vladimir) Putin and Russia are committed to a constructive negotiation process, which does not have an alternative for stabilising the international energy market," Peskov said.

Coordinated cuts between OPEC+ members expired on March 31, having helped support crude prices since they began in January 2017.

Read more: UAE backs Saudi Arabia’s proposal to end oil price war

Oil prices hit an 18-year low on March 30 due to a slump in demand caused by lockdowns to contain the coronavirus outbreak, and the failure of OPEC and other producers to deepen or extend coordinated output cuts.

On Friday, Brent crude futures LCOc1 rose 13.9 percent, or $4.17 a barrel, to settle at $34.11. U.S. West Texas Intermediate (WTI) crude CLc1 rose $3.02, or 11.93 percent to settle at $28.34.

OPEC and its allies were working on a global agreement for an unprecedented oil production cut equivalent to around 10% of worldwide supply, an OPEC source said on Friday.

Read more: Saudi Arabia supported by world’s lowest oil cost amid price war, coronavirus

They expect that to be part of a global effort including countries that do not exert state control over output, such as the United States.

Iraq's oil minister said on Sunday that any new deal needs support from key producers from outside the OPEC+ alliance, such as the United States, Canada and Norway.

Trump has however made no commitment to take the extraordinary step of persuading US companies to cut output.

The United States is not part of OPEC+ and the idea of Washington curbing production has long been seen as impossible, not least because of U.S. antitrust laws.

On Saturday, US President Donald Trump focused instead on tariffs as a response to the oil price crash.

"If I have to do tariffs on oil coming from outside or if I have to do something to protect our ... tens of thousands of energy workers and our great companies that produce all these jobs, I'll do whatever I have to do," Trump told reporters in a briefing about the coronavirus outbreak.

Other oil producers that do not belong to OPEC+ have indicated a willingness to help. Canada's Alberta province, home to the world's third-largest oil reserves, is open to joining any potential global pact.

Norway, Western Europe's largest oil and gas producer, said on Saturday it would consider cuts to its oil output if a wide global deal is agreed.

Read more:

A new global oil pact is worth exploring, even if it fails

Trump says Saudi Arabian, Russian leaders both want to stabilize oil market

Deep OPEC+ cuts won't be enough to prevent oil inventory build: IEA head

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