WASHINGTON—U.S. Energy Secretary Dan Brouillette said on April 6 that after speaking with the energy ministers of Saudi Arabia and Russia he believes the countries will cut oil output and end their war over market share this week.
“They are going to get together later this week and hopefully end this disagreement that started perhaps two or three weeks ago,” Brouillette told Fox Business Network.
When asked if he believes major producers Russia and Saudi Arabia would agree to participate in an oil production cut of between 10% to 15% of global oil supply, he said, “yes, I do.”
Oil prices have plummeted as demand crumbled on global economic shutdowns during the coronavirus outbreak, and as Saudi Arabia and Russia have pumped oil flat out in a war for market share.
Oil prices fell sharply on April 6 after Saudi Arabia and Russia delayed a meeting on oil markets. OPEC and its allies, a group known as OPEC+, are now expected to meet on April 9.
President Donald Trump has said a deal could see cuts of 10% to 15% of global supply, although analysts say even such a huge reduction would not address the problem of global demand which has slumped as much as 30 MMbbl/d during the coronavirus outbreak.
Brouillette said the United States is encouraging Saudi Arabia, chair of the G-20 this year, to convene a G-20 energy ministerial meeting toward the end of the week “and I expect that that’s going to happen.”
Brouillette spoke to Saudi counterpart Prince Abdulaziz bin Salman at the weekend, telling him the battle for market share has “major implications” for the United States and the world, the U.S. Energy Department said.
Many highly leveraged U.S. shale drillers risk bankruptcies and oil workers face layoffs.
Brouillette said some U.S. lawmakers saw Russia and Saudi Arabia’s moves to boost output as “predatory.”
“Some saw the actions to increase production ... as a direct attack on the U.S. shale industry,” Brouillette told Fox. Two Republican U.S. senators from energy producing states introduced in late March a bill requiring removal of all U.S. troops and equipment from Saudi Arabia including Patriot missiles and THAAD defense systems, but the legislation faces an uphill battle.
Brouillette also said the U.S. energy industry will have to adjust accordingly to reduced demand from the coronavirus outbreak.
Recommended Reading
TGS, SLB to Conduct Engagement Phase 5 in GoM
2024-02-05 - TGS and SLB’s seventh program within the joint venture involves the acquisition of 157 Outer Continental Shelf blocks.
2023-2025 Subsea Tieback Round-Up
2024-02-06 - Here's a look at subsea tieback projects across the globe. The first in a two-part series, this report highlights some of the subsea tiebacks scheduled to be online by 2025.
StimStixx, Hunting Titan Partner on Well Perforation, Acidizing
2024-02-07 - The strategic partnership between StimStixx Technologies and Hunting Titan will increase well treatments and reduce costs, the companies said.
Tech Trends: QYSEA’s Artificially Intelligent Underwater Additions
2024-02-13 - Using their AI underwater image filtering algorithm, the QYSEA AI Diver Tracking allows the FIFISH ROV to identify a diver's movements and conducts real-time automatic analysis.
Subsea Tieback Round-Up, 2026 and Beyond
2024-02-13 - The second in a two-part series, this report on subsea tiebacks looks at some of the projects around the world scheduled to come online in 2026 or later.