Donald Trump to talk with Russian President Putin regarding low oil prices

As oil prices are plunging and impacting the United States producers, US President Donald Trump reportedly said that he will ‘soon’ talk to his Russian counterpart Vladimir Putin regarding the same. Amid an escalating price war between Russia and Saudi Arabia, the global market is experiencing a crude glut and Trump reportedly said that people in the oil and gas business are ‘really hurting’. While speaking to an international media outlet, Trump said that he will ‘very soon’ make a phone call to Putin and ‘energy’ will be one of the main subjects of the talks. 

Meanwhile, Saudi Arabia on March 30 said that it will be increasing oil exports to a record 10.6 million barrels per day from May. An official at the Saudi energy ministry said, “The kingdom plans to raise its petroleum exports by 600,000 BPD from May, so total exports will increase to 10.6 million BPD”. The recent statement by Saudi Arabia now means that the world’s top exporter will add at least 3.6 million BPD of additional supplies to the global market. 

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Saudi-Russia oil price war

Earlier this month, a three-year supply pact between Organisation of the Petroleum Exporting Countries (OPEC) and its allies led by Russia fell apart as Moscow refused to support Riyadh’s plan for deeper production cuts amid coronavirus. Saudi Arabia has repeatedly said that it was not in talks with Russia to stabilise crude prices despite the pressure from Washington to call a truce in the oil price war. Moscow, on the other hand, has declined to support bigger output curbs, arguing that it was too early to estimate the impact of the virus outbreak. 

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Saudi’s move has also put Washington in a difficult position as its battle for market share has led to very low prices. However, US shale industry reportedly has a much higher coast than Saudi or Russian production. Furthermore, Media reports suggest that the flood of supply coming from Saudi Arabia and Russia could lead to the largest surplus of crude in history.

Meanwhile, earlier this month, Trump said that Washington would take advantage of low oil prices to fill emergency crude oil reserves. India also took advantage of the low oil prices in the international market as the government raised excise duty on fuel by Rs 3 per litre. Central banks all over the world took action to prevent the economic fall out with US Federal Reserves on March 15 slashing its key rates to near zero. 

(With PTI inputs)

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