Mar 6, 2020 - Energy & Environment

Oil plunges as OPEC-Russia talks collapse

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New aftershocks from Saudi-Russia oil rupture

Photo: Alexey Nikolskey/Sputnik/AFP via Getty Images

Saudi Arabia plans to boost oil output and sharply cut prices, signaling the first response to Friday's collapse of OPEC's production-cutting pact with Russia and allied producers, according to multiple reports.

Why it matters: The unraveling of the OPEC+ agreement, at least for now, and declining oil demand due to the novel coronavirus' economic toll are upending global oil markets and geopolitics.

Oil prices plunge as market absorbs OPEC-Russia split

A Kuwaiti trader checks stock prices at Boursa Kuwait in Kuwait City, on March 8, 2020. Photo: Yasser Al-Zayyat/AFP via Getty Images

Oil prices nosedived to four-year lows Sunday as trading resumed after Friday's collapse of the OPEC-Russia production-limiting pact, a rupture slated to increase supplies at a time when the novel coronavirus is sapping demand.

The state of play: The immediate 31% collapse when trading resumed last night was the second-largest on record behind the 1991 Gulf war, Bloomberg reports.

OPEC puts the ball in Russia's court on oil production amid coronavirus spread

Saudi Energy Minister Abdulaziz bin Salman Al Saud in Vienna on March 5. Photo: Askin Kiyagan/Anadolu Agency via Getty Images

OPEC ministers have agreed to push for deepening their joint production-cutting agreement with Russia and allied producers by 1.5 million barrels per day, per reports from Vienna.

Why it matters: The cartel is trying to grapple with how the novel coronavirus is sapping oil demand and depressing prices.