Russia and Saudi Arabia have currently postponed the meeting to stop the constantly falling crude prices. Despite Donald Trump’s pressure, the meeting could not take place due to differences in some OPEC countries and Russia. After this, the prices of crude have decreased once again. Experts say that the demand for crude is already very low due to the presence of coronavirus. On the other hand, there is no conclusion on how to cut crude production from OPEC countries, Russia and America. Due to this, the crude will fall back below $ 20 per barrel. At the same time, according to a report published in CNBC, some analysts believe that crude prices can come down to $ 10.
What is the current problem?
At present, the biggest problem is that all the OPEC countries including Saudi Arabia are not backing down on the price war on crude. Anuj Gupta, Deputy Vice President, Commodity and Currency, Angel Broking, said that in the last few days the market share in total imports of OPEC countries had decreased. One of the reasons was the increased production in the US and Russia. Now OPEC countries are in the mood to increase their market share once again by selling crude cheaply. Therefore, there is no cut in their production. Because of this, there has been a huge drop in crude demand due to low demand and oversupply. After this, America has been wanting that the crude producing countries around the world reduce the production and decrease the price cut, which will help in price stabilization.
US pressure to cut production
Since the price war on crude, the way crude prices have fallen and exports from OPEC countries have increased, the problem has increased for America. The balance sheet of companies associated with the oil business in America has deteriorated badly. Many companies are on the verge of closure. There is a job crisis in these companies. Millions lost their jobs, due to which the job data has deteriorated. That is why the US wants OPEC countries and Russia to solve this problem together.
If the tariff is imposed, the situation will get worse
The US has recently warned that if there is no solution to stop crude prices from the OPEC countries, then they will increase the tariff on crude imports. This situation is going to increase pressure. If the US imposes tariffs, then demand for crude coming from outside will decrease further. Due to this, the decline in crude may increase again. Let us tell you that since the proposed meeting between Russia and OPEC countries, crude oil had gone up by $ 12 per barrel. It was expected that measures would be taken to stop the price war in the meeting. Crude reached $ 34.11 a barrel on 3 April.