Oil plunges to lowest since 2017 after Russia rejects steep OPEC cut

Oil prices tanked more than 7 per cent on Friday to their lowest levels since mid-2017 after Reuters reported that Russia balked at OPEC’s proposed steep production cuts to stabilize prices.

A Russian high-level source told Reuters that Moscow would not back a call for extra reductions in oil output and would agree only to an extension of existing cuts by the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+.

“If this results in OPEC not going through with their own proposed 1 million bpd cuts in Q2, the result … could be devastating. Brent could swiftly drop 15 per cent to the low $40s and WTI to the high $30s in this scenario,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.