SAINT-PETERSBOURG – Russian oil giant Rosneft and Chinese state-based CNPC signed a $270 billion contract on Friday to supply China with oil over 25 years, a deal Russian President Vladimir Putin touted as “unprecedented.” Later, on 3 April, the Saudi foreign and energy ministers issued statements criticizing Putin and accusing Russia of not participating in the OPEC agreement.  Rosneft has also signed contracts with Eni, Exxon and Statoil for LNG deliveries. “Any agreement on the extension of the cuts is conditional on countries that failed to fully comply with their cuts in May compensate for their overproduction,” the source said. As a result of the COVID 19 pandemic, plant production and transportation declined, which also led to a decline in aggregate oil demand and oil prices.  February 15, 2020, the International Energy Agency forecast that demand growth would fall to its lowest level since 2011, with growth of 325,000 barrels per day over the full year, to 825,000 barrels per day and a decline in consumption of 435,000 barrels per day in the first quarter.  Although global oil demand has declined, a drop in demand in Chinese markets, the largest since 2008, triggered an OPEC summit on March 5, 2020 in Vienna. At the summit, OPEC agreed to further reduce oil production by 1.5 million barrels per day by the second quarter of the year (an overall production cut of 3.6 million bpd from the original 2016 agreement), and the group is expected to review that policy on June 9 at its next meeting.  OPEC has asked Russia and other non-OPEC members to comply with OPEC`s decision.  On 6 March 2020, Russia rejected the request, marking the end of the unofficial partnership, as oil prices fell by 10% after the announcement.   On March 8, 2020, Saudi Arabia launched a price war with Russia, which facilitated a quarterly drop of 65% in the price of oil.  In the first weeks of March, U.S. oil prices fell by 34%, crude oil by 26% and Brent oil by 24%.   The price war was triggered by a breakdown in the dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over planned oil production cuts in the midst of the COVID 19 pandemic.
 Russia left the agreement, which led to the downfall of the OPEC alliance. Oil prices had already fallen by 30% since the beginning of the year due to a drop in demand.  The fight for awards is one of the main causes and impact of the global stock market crash that followed.  MOSCOW (Reuters) – Russia`s Energy Ministry said on Sunday that the country`s oil production in July remained unchanged from its June level, in line with an OPEC agreement. According to the sources, there is still no agreement on whether an OPEC production meeting is to take place on Thursday, the main obstacle being relations with countries that have not achieved the deep supply cuts required under the existing pact. In addition to many other energy agreements signed in St. Petersburg, CNPC and independent Russian gas producer Novatek have signed a contract to ship Russian liquefied natural gas (LNG) to China. The latest news about the effectiveness of coronavirus vaccines, which have pushed oil prices to their highest level since their fall in April, may have made it more difficult to reach an agreement.
In response to these higher prices, some oil producers saw less need to maintain supply and wanted to increase pumps to try to improve nearly a year with gloomy oil yields. The agreement committed to gradually tripling China`s supply of Russian oil over the next 25 years, which currently is 15 million tonnes per year. Putin said Russia would send up to 46 million tons of oil a year to China under the treaty. Under the agreement, members of the Organization of Petroleum Exporting Countries, along with Russia and other countries, will increase production by 500,000 barrels per day in January and possibly by a quant