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Russia, Saudi Arabia To Discuss Cutting Oil Output Amid Glut

Saudi Energy Minister Prince Abdulaziz bin Salman al-Saud (left) and Russian Energy Minister Aleksandr Novak attend an OPEC+ meeting in Vienna on December 6, 2019.

Representatives of the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other oil-producing countries are set to meet to try to agree to cut output to stabilize the global oil market.

The meeting comes as oil prices have dropped to a level not seen in decades, with travel restrictions and lockdowns issued amid the coronavirus pandemic drastically reducing demand for energy.

Oil prices before the pandemic were already weak, owing in part to a dispute between Saudi Arabia and Russia, two of the world's largest oil producers, over a previous pact on curbing supplies.

Recent efforts to address the glut and decline in prices have been complicated by the reluctance of the United States to agree to participate in a cut over fears that it would violate U.S. antitrust laws.

U.S. President Donald Trump said last week he brokered a deal with Saudi Arabia and Russia that could lead to cuts of as much as 10 million to 15 million barrels per day, an unprecedented amount.

Such a cut would require the participation of producers outside OPEC and its allies, and Saudi Arabia and Russia have yet to indicate any agreement on reducing output.

The Trump administration has shown no desire to mandate cuts in domestic supply, saying the country's output has already dropped without government action.

Kremlin spokesman Dmitry Peskov said on April 8 there was a difference between a natural decline in output and a reduction.

"You are comparing overall decline in demand with cuts aimed at stabilizing global markets. These are different concepts and they could not be compared," Peskov said.

The meeting on April 9 of OPEC, Russia, and other producers will be a video conference in keeping with guidelines to avoid large gatherings amid the pandemic.

On the eve of the meeting, nearly 50 Republican members of the U.S. Congress told Saudi Crown Prince Muhammad bin Salman in a letter that economic and military cooperation between Washington and Riyadh is at risk unless the kingdom helps to stabilize oil prices by cutting output.

The message is the latest U.S. move to pressure Saudi Arabia to cut production.

With reporting by Reuters, AP, and AFP
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