Failure to reach an agreement between OPEC, Russia and other members of an alliance known as OPEC +, which has supported oil prices since 2016, has rocked the price of crude by reference.
Brent has lost nearly a third of its value this year, falling to $ 47 a barrel, putting oil-dependent countries to the test and putting many American shales and other energy companies in trouble.
“The agreement is dead,” said an OPEC source.
OPEC sources told Reuters that Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries and the group’s largest crude producer, had failed to find a compromise with the Russia during discussions on Friday.
As a result, the existing agreement for production cuts will expire in March, so OPEC members and non-OPEC producers can theoretically pump at will in an already crowded market, sources said. Oil prices fell more than 6% to $ 47 a barrel.
OPEC ministers said on Thursday that the coronavirus epidemic had created an “unprecedented situation” that required action because measures to stop the spread of the virus were slowing global economic activity and demand for oil.
The forecast for demand growth in 2020 has been cut, but Moscow has long argued that it is too early to assess the impact and sources, said Russian Minister of Energy Alexander Novak, who transmitted the same message on Friday.
OPEC ministers said on Thursday that they were supporting an additional 1.5 million barrels per day (b / d) of oil cuts until the end of 2020, about 1.5% of world demand, a much larger and more extensive movement than expected.
They also called for extending the current OPEC + reductions by 2.1 million barrels per day, which means that the proposed combined total of planned reductions would have been 3.6 million barrels per day, or about 3 , 6% of the world supply.
But they made the proposal conditional on Russia and other non-OPEC producers supporting the restrictions.
Novak, who had bilateral talks with his Saudi counterpart, Prince Abdulaziz bin Salman, made no public statement on the oil cuts during his trips to and from Vienna this week.
The Kremlin said Friday that President Vladimir Putin did not intend to speak to Saudi leaders, an announcement that dashed hopes that an agreement could be saved from above.
Inside OPEC headquarters, informal consultations continued for more than six hours, with the official meeting of OPEC + ministers postponed several times from 9:00 GMT.
