The oil market will not be a topic of discussion at the G-20 video summit later on Thursday, the Kremlin spokesman Dmitry Peskov told reporters when asked about the agenda of the summit.
The virtual host for the G-20 event will be Saudi Arabia, OPEC’s leader and Russia’s former partner in managing the oil market.
“The topic of oil – no, but the topic of the economic repercussions of the coronavirus on the global economy will not remain undiscussed,” Peskov, spokesman for Russia’s President Vladimir Putin, told Russian media on Thursday, as carried by TASS.
“I repeat, the main topic will be the international efforts to combat the coronavirus,” Peskov said, answering a question whether the G-20 leaders would discuss the situation on the oil market.
Due to the Saudi-Russian oil price war and the plunging demand as economies remain under lockdown, the situation on the oil market is such that no major oil-producing nation will exit unscarred. Oil at below $30 a barrel is unsustainable for the indebted U.S. shale industry, which cannot make any money at these prices. But the situation on the market is not forever sustainable, even for Saudi Arabia and Russia. They both will need to tap into their sovereign wealth funds to patch up budget shortfalls from lower revenues at $30 oil.
The G-20 call is expected to touch on the situation on the oil market, not least of the oil and oil demand’s importance in the global economy, a person with knowledge of the plans told reporter.
The U.S. is said to be pressing Saudi Arabia to “rise to the occasion” and reassure the oil markets. U.S. Secretary of State Mike Pompeo spoke with Saudi Crown Prince Mohammed bin Salman on Wednesday, and “we agreed all countries need to work together to contain the pandemic and stabilize energy markets,” Secretary Pompeo said.
The U.S. plans to press the Saudis to give up on their plans to significantly boost production from April 1, using the G-20 summit to do so, the Wall Street Journal reported on Wednesday, citing people with knowledge of the matter.