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Russia And Saudi Arabia Discussed The Situation In The Oil Market

Russia And Saudi Arabia Discussed The Situation In The Oil Market

Russia and Saudi Arabia mark the beginning of a recovery in the global economy and demand for oil, as well as easing concerns about the limitations of the world's oil storage facilities. This is stated in a joint statement of the Ministry of Energy of the two countries following a telephone conversation between energy Ministers.

"Russia and Saudi Arabia are pleased with the signs of improving economic and market indicators, especially the growth in oil demand and easing concerns about limited oil storage, while various countries around the world are beginning to exit from strict restrictions," the statement said.

It also emphasizes that Russia and Saudi Arabia are "firmly committed to achieving market stability and accelerating the rebalancing of the oil market."

The Russian Energy Ministry also welcomes the intention of Saudi Arabia, the UAE, and Kuwait to further reduce oil production in June, as this decision will accelerate the process of restoring balance in the oil market.

"Russian Energy Minister Alexander Novak welcomes the additional voluntary significant production cuts made by Saudi Arabia and the steps taken by the United Arab Emirates and Kuwait to support Saudi Arabia's efforts, noting that these actions are clear evidence of decisive actions that are highly welcome and necessary to accelerate the process of rebalancing the oil market," the document says.

Countries also highlighted the efforts of responsible manufacturers around the world who voluntarily adjusted their production out of a sense of shared responsibility for the market situation. "The parties are confident that their OPEC + partners also fully support these goals and will comply with the provisions of the OPEC+ agreement," the statement said.

Late in the evening on May 12, Saudi Arabia appealed to the partners in the agreement calling on all participants to strengthen production cuts. The Kingdom itself in June promised to further reduce production by 1 million b/d. The UAE and Kuwait will take similar measures. Together, they will reduce by another 1.2 million b/d to the total quota.

On April 12, OPEC+ countries signed a new agreement to reduce oil production. It provides for a total reduction in daily oil production in may-June by 9.7 million barrels, in July-December-by 7.7 million barrels, in January 2021-April 2022-by 5.8 million barrels.

In particular, Russia and Saudi Arabia, the largest participants in the deal, will reduce production by 2.5 million barrels per day each from the level of 11 million barrels. Other countries will reduce production from the level of October 2018.

Also, the US can reduce production by 2-3 million barrels per day, Russian Energy Minister Alexander Novak told TASS.

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