Saudi Arabia, Russia and other OPEC+ countries agree on deal to cut oil output

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An Austrian army soldier stands in front of the Organization of the Petroleum Exporting Countries (OPEC) headquarters in Vienna, Austria, on April 9, 2020. (REUTERS/Leonhard Foeger) 
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An Austrian soldier stands guard in front of OPEC's headquarters in Vienna on Thursday. (Reuters)
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Updated 10 April 2020

Saudi Arabia, Russia and other OPEC+ countries agree on deal to cut oil output

  • OPEC+ alliance reset with ‘historic’ deal
  • Deal meant to rebalance crude markets

DUBAI: Saudi Arabia and Russia have agreed to “historic” cuts in oil production in a bid to rebalance crude markets that are in crisis because of the dramatic decline in global energy demand.

The cuts, agreed on during a virtual meeting of oil producers hosted by the Vienna headquarters of the Organization of Petroleum Exporting Countries, will take more than 10 million barrels of oil out of production each day for the immediate future.

The final details of the “outline” deal are still being considered, and Saudi oil sources said a definitive remedy to the challenges facing the global oil industry might have to await a meeting of G20 energy ministers, under the Saudi presidency of the group, which is scheduled for today.

The timing, duration and scale of the cuts were being worked out by OPEC delegates last night. 

The deal — which resets the OPEC+ alliance — represents a rapprochement between Saudi Arabia and Russia, who fell out last month over production cut plans, and exchanged angry words last weekend about the oil price war.

The sun sets behind an idle pump jack near Karnes City, Texas, on April 8, 2020. Demand for oil continues to fall due to the new coronavirus outbreak. (AP Photo/Eric Gay)

“Russia and Saudi Arabia, working closely together with the US, can bring stability back to global energy markets,” Kirill Dmitriev, chief executive of the Russian Direct Investment Fund and a member of the Russian negotiating team, told Arab News.

“It is an important and historic moment that, in the face of the pandemic, we have agreed to put aside differences and move toward a deal that will involve OPEC+ members and other oil-producing countries.”

The price of Brent crude, the Middle East benchmark, reflected the ongoing concern about the level of over-supply, regardless of the OPEC+ deal. It stood at $33.35, down almost 1 percent, in mid-afternoon US trading.

The online meeting began with a gloomy outlook as OPEC detailed the collapse of global oil demand. Analysts believe that more than 20 percent of worldwide consumption disappeared in March as economies ground to a halt because of measures to slow the spread of the coronavirus. With producers pumping crude at record rates, they are rapidly running out of global storage capacity.

Mohammed Barkindo, OPEC’s secretary general, told delegates that storage space will be full by next month if no cuts are agreed. He estimated that an average of 6.85 million barrels per day of demand would be lost this year. “The supply and demand fundamentals are horrifying,” he added.

Alexander Novak, the Russian energy minister, told the meeting that all oil producers should contribute to the cuts. His comment was aimed at the US, which was not represented at the Vienna gathering. Dan Brouillette, the US energy secretary, is expected to take part in the G20 conference today.

Nvidia deal for Arm will drive computing power growth, says SoftBank’s CEO

Updated 23 October 2020

Nvidia deal for Arm will drive computing power growth, says SoftBank’s CEO

  • Saudi Arabia's Public Investment Fund (PIF) is an anchor investor in the $100 billion Vision Fund

TOKYO/DUBAI: SoftBank Group Corp. CEO Masayoshi Son said on Thursday the sale of chip designer Arm to Nvidia Corp. will drive growth in computing power, in his first public comments since the $40 billion deal was announced in September.
Son made the comments at a virtual summit about artificial intelligence hosted by Saudi Arabia, an anchor investor in the $100 billion Vision Fund, at which he reiterated his belief that AI would transform society.
The Nvidia deal, part of a series of asset sales by Son, whose group has been shaken by soured investments and the COVID-19 pandemic, has raised concerns it will threaten Arm’s role as a neutral supplier in the industry.
Son is set to speak next week with Nvidia CEO Jensen Huang at SoftBank World, the group’s annual event for customers and suppliers that is being retooled as it focuses on investing.
SoftBank’s growing cash pile is driving speculation about future investment plans, with the Vision Fund targeting external funding for a blank-check company, a source said, in a sign the group is regaining its mojo.
“I am a risk taker,” Son said on Thursday.
Rajeev Misra, CEO of SoftBank Investment Advisers which oversees the Vision Fund, said the market share gained by online commerce companies in the last six to eight months is more than what they gained in the previous four years put together.
“COVID has accelerated the acceleration of AI even further,” Misra told the same conference, adding in the 105 companies Vision Fund 1 and 2 have invested in, artificial intelligence is the core of their businesses.