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Saudi Arabia has called for an urgent meeting with all the OPEC members and the non-OPEC oil producers to stabilize the global oil prices. After the news, the oil price jumped almost 25%.
The Saudi Arabia government has called for an urgent meeting of OPEC and a group of non-OPEC countries to try and reach a fair deal to restore balance to the oil prices. The news which was conveyed through the state news agency SPA has been revealed today on Thursday. As a result, oil prices jumped almost 25%.
Initially, the oil prices had surged 10% after the U.S. President Donald Trump said he expects Saudi Arabia and Russia to come to a common agreement about the oil price war. Oil prices have been hit hard by the lack of agreement between the two oil giant producers, and more to it, the low demand caused by the ongoing coronavirus crisis.
However, the Russian Energy Minister Alexander Novak said that the country had no plans to reduce its crude oil production. Despite the hard stand by the Russians, the Saudis remain positive that a fair deal will be met to stabilize the oil prices.
One of the senior Gulf analysts said:
“Saudi Arabia has always welcomed and supported cooperation among oil producers in their efforts to stabilize the oil market during the current crisis, based on the principles of fairness and equity.”
Initially, Aljazeera had reported that the strategic relationship between the United States and Saudi Arabia may take a different path if the Saudis do not resolve its oil production war with Russia.
Republican Senator Dan Sullivan told CNBC:
“The Saudis have really brought in a supply shock at exactly the wrong time, this kind of crisis makes it clear who your friends are and who aren’t your friends.”
Will Global Oil Prices Change after Urgent Meeting Called by Saudi Arabia?
The oil industry has had successful years, with the oil giant producers sharing equitably the global demand of the black commodity. However, after the wake of the novel coronavirus, things changed drastically for the worst, after the demand crashed suddenly.
Industries that heavily depend on oil have rendered closed to assist the local respective authorities to control the spread of the virus. Industries like air travel have been grounded all over the world after most countries closed their borders.
It is expected that the meeting will yield positive results, as the bullets are depleting fast for the oil producers to stabilize the oil prices. However, will the solution be long term? Well, that’s a question that can only be answered if a vaccine or cure for the coronavirus is approved sooner to save the world economy at large.