Ministers from OPEC and OPEC+ arrived Friday at the Vienna-based headquarters of the Organization of Petroleum Exporting Countries, with Iranian Oil Minister Bijan Namdar Zanganeh saying he expected a hard meeting.
OPEC ministers on Thursday recommended a 1.5-million-barrels-per-day cut in the face of the global slowdown caused by the epidemic and the resulting fall in demand for oil, but the decision hinges on agreement from the so-called OPEC+ grouping - Russian Federation foremost among them.
The sudden plunge Friday came with all eyes on Russian Federation at the gathering of OPEC countries and non-cartel producers in Vienna. OPEC ministers have called for extending that deal as part of a new pact, taking total supply reductions to about 3.6 million bpd.
But shortly after the announcement, crude oil prices, especially that of Brent blend produced by Nigeria, declined further by nearly one per cent to $50.71 per barrel.
The meetings are held at OPEC headquarters in Vienna.
Global oil prices fell more than eight per cent Friday as the development revived fears of a price crash similar to 2014, when Saudi Arabia and Russian Federation fought for market share with US shale oil producers.
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According to the plan drawn up by OPEC, allies in the so-called OPEC+ grouping would take on 500,000 barrels of the cuts. Russia, however, wasn't present at that gathering and wants to maintain current output cuts until June.
The collapse of talks between the world's largest oil producing nations has stoked investor fears that the coronavirus could trigger the most severe oil market shock in history by throttling demand from heavy industry and airlines.
"An agreement to reduce the OPEC+ group output level by at least one million barrels per day is imperative; otherwise oil prices will re-visit the recent lows and possibly break below them", said analyst Tamas Varga of PVM Oil Associates.
The proposed OPEC cut of 1.5 million bpd, if approved, would bring the group's overall output reduction to 3.6 million bpd or about 3.6% of global supplies.
"I'm a little shocked frankly because [the Russians] are really playing with fire", Samantha Gross, a fellow in the Cross-Brookings Initiative on Energy and Climate, told Al Jazeera. European shares opened sharply lower, with travel stocks bearing the brunt.
Meanwhile, ANZ said that global oil consumption could fall by 1.6 million bpd in the first half of 2020 and contract by about 300,000 bpd for the full year.