The demand for oil is bleak. According to the IHS Markit, there's currently an oversupply of oil in the markets, and it's the largest one ever recorded.
Russian President Vladimir Putin said that he will not give in to Saudi Arabia's "blackmail" despite the fact that Russia would prefer oil's prices to be higher. At the same time, in the US, Donald Trump's close associates are being forced to consider imposing import tariffs or other sanctions on Saudi and Russian oil.
On Thursday, Trump said that he could intervene in the oil price war between Russia and Saudi Arabia, which has shaken the US oil drillers. He will not put trade barriers on their oil, but use his deal-making skills to bring them together to agree on a unified response that would include America and the rest of the world. Yes, oil companies will still be uncomfortable, but the alternative is the death of the shale sector, which, if pushed to the extreme, may even cause some kind of war in the Middle East to stop the supplies.
Although it will not be easy to make such a deal, there are agencies that show willingness to help make it happen, just like the Texas Railroad Commission, who indicated its willingness to participate in solving this problem.
Meanwhile, on Saturday, March 21, the first Deputy Prime Minister, Andrey Belousov, told TASS that Russia is not going to provoke a drop in oil prices, nor going to stop cooperating with OPEC. According to Belousov, Russia even offered existing restrictions for at least one quarter and even until the end of 2020. TASS said that, unfortunately, the Arab partners took a different position.
On March 23, Russian Minister of Energy Alexander Novak called a meeting with oil companies to discuss the state of the oil markets. There, Igor Sechin said that if shale oil, produced in large quantities by the United States, is forced out of the market, then, by the end of the year, world oil prices may return to $ 60 per barrel. Belousov, on the other hand, assumes that the price will be balanced in the range of 35-40 dollars per barrel.
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