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US Pressurizes KSA to cut crude output


Syed Umarullah HussainiWeb Editor

12th Apr, 2020. 10:30 am
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oil

United States is pressurizing Saudi Arabia to put oil cut in motion.

Media reports said that the Republican senators from oil states talked to officials from the Kingdom and urged them to take timely actions to cut crude output.

Senators Dan Sullivan and Kevin Cramer the call.

These are the senators who introduced legislation in March to remove U.S. troops, Patriot missiles and THAAD defense systems from Saudi Arabia unless it cut output.

They spoke with Saudi Energy Minister Prince Abdulaziz bin Salman, Deputy Defense Minister Khalid bin Salman and the Saudi ambassador to the United States, Princess Reema bint Bandar bin Sultan.

There were 11 Republican senators on the nearly two-hour call, including Bill Cassidy, who introduced legislation last week to remove the U.S. troops in 30 days, a month faster than the previous legislation.

Oil prices had dropped to 18-year lows as deadly coronavirus outbreak has closed down economies across world and after Saudi Arabia and Russia boosted output in a race for market share.

OPEC

Earlier OPEC and its allies agreed to cut oil output by more than a fifth and said they expected the United States and other producers to join in their effort to lift prices that have been pummeled by the coronavirus outbreak.

Saudi Arabia-led OPEC and Russia-led non-OPEC oil producing nations started their 9th (Extraordinary) OPEC and non-OPEC ministerial meeting via webinar.

The group dubbed OPEC+ will lower its crude oil production by 10 million bpd for a two-month period from May 1 until June 30, according to the statement.

For the following six months, from July 1 to Dec. 31, the output cut will be 8 million bpd.

This will then adjusted to a 6 million bpd cut for 16 months, from Jan. 1, 2021 to April 30, 2022.

The baseline for the oil production cuts will be the oil output levels of OPEC+ members from last October. However, heavyweights Saudi Arabia and Russia will apply the cuts based on their output of 11.0 million bpd.

While the current agreement will be valid through April 30, 2022, its extension will be reviewed in December 2021.

OPEC+ members will meet on June 10 this year via webinar to determine whether any other actions needed to balance the oil market.

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