Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman, left, and Russia's Energy Minister Alexander Novak attended a December meeting of OPEC and non-OPEC countries in Vienna, Austria.
Photo: leonhard foeger/ReutersA global coalition of oil-producing nations has postponed an emergency summit planned for Monday as hopes of an unprecedented production pact among the world’s three biggest crude producers faded.
A 23-nation alliance led by Saudi Arabia and Russia was due to debate world-wide production cuts of 10 million barrels a day on Monday and had hoped to include the U.S. as the coronavirus outbreak continues to erode oil demand. But the virtual meeting has now been delayed after Saudi Arabia and Russia swapped barbs and the U.S. failed to outline production cuts of its own.
After conversations with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, President Donald Trump on Thursday tweeted that a truce could be worked out in the oil-price war between the Saudi Arabia and Russia. The president’s tweet sparked a record-breaking 25% climb in oil prices.
But late Friday, Mr. Putin accused Riyadh of flooding the market to remove U.S. shale-oil producing competitors from the market. Saudi Energy Minister Prince Abdulaziz bin Salman, a brother of Prince Mohammed, responded that the Russian allegation was “completely false.”
With the two most important players fighting, the 23-country alliance gathering the Saudi-led Organization of the Petroleum Exporting Countries and its Russia-led partners has been forced to push the Monday meeting to either Wednesday or Thursday, according to OPEC delegates.
“I don’t see how an agreement can be reached if we are in a war of words at the moment,” a Saudi oil official said.
Complicating matters, Saudi Prince Abdulaziz bin Salman and Russian Energy Minister Alexander Novak haven't spoken since clashing over production cuts at an early March meeting, the officials said. “This is what happens when you close all channels of communication,” one delegate said.
Saudi Arabia and Russia have said privately they were unlikely to implement cuts unless U.S. producers also cut production. Texas, the U.S.’s biggest producing state, is considering enforcing mandatory reductions of oil production. Delegates say they were waiting for signs of broad U.S. support for cuts from President Trump after his meeting with the heads of U.S. energy companies at the White House Friday. Those signals never came, making it difficult for the OPEC alliance to agree on cuts, the delegates said.
The effects of the coronavirus pandemic have prompted investment banks and commodities traders to repeatedly slash their forecasts for global oil demand. Goldman Sachs on Monday said oil demand this week would fall by 26 million barrels a day—or a quarter of global demand.
Corrections & Amplifications
Saudi Arabia and Russia have said privately they were unlikely to implement cuts unless U.S. producers also cut production. An earlier version of this article incorrectly stated that they were unlikely to implement cuts if U.S. producers also cut production. (April 4, 2020)
Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com
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