Saudi Arabia Defies US Pressures to End Oil Price War with Russia

Riyadh launched an oil price war against Moscow earlier this month after the latter refused to back a proposal for deep output cuts to offset virus demand blow.

A three-year supply pact between the Saudi-led Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia fell apart after Moscow refused to support Riyadh's plan for deeper production cuts to offset dwindling demand resulting from the coronavirus pandemic.

Saudi Arabia responded to the breakdown in relations by lowering the prices it charges for crude and pledging to pump oil next month at record levels.

The resulting supply boost has coincided with plummeting demand as governments around the world implement national lockdowns to slow the spread of the coronavirus. The twin-pronged assault on prices has sent Brent crude to a 17-year low below $25 a barrel and hammered the income of oil producers.

"There have been no contacts between Saudi Arabia and Russia energy ministers over any increase in the number of OPEC countries, nor any discussion of a joint agreement to balance oil markets," Al Jazeera cited an official from Saudi Arabia's energy ministry as saying.

The comment came after a senior Russian official said on Friday that a larger number of oil producers could cooperate with OPEC and Russia, in an indirect reference to the United States, the world's biggest producer, which has never cut production.

"Joint actions by countries are needed to restore the [global] economy ... They [joint actions] are also possible in the OPEC deal's framework," said Kirill Dmitriev, the head of Russia's sovereign wealth fund.

Dmitriev and Energy Minister Alexander Novak were Russia's top negotiators for the previous pact between OPEC and its allies - a grouping known as OPEC+.  That deal officially expires on March 31. Dmitriev declined to say which nations could be included in a new one. 

The alliance between OPEC and Russia broke down after Moscow declined to support bigger output curbs, arguing that it was too early to estimate the pandemic's impact.

Officials and oil executives in Russia have been split on the need for cuts, with Dmitriev and Novak supporting cooperation while Igor Sechin, the head of Kremlin oil major Rosneft, has criticised supply cuts for providing a lifeline to the less competitive US shale industry.

Russian President Vladimir Putin has said little since the OPEC deal collapsed.