FX.co ★ Oil prices dive as Saudi Arabia and Russia demand members to comply

Saudi Arabia and Russia find it necessary to extend the current agreement on output cuts for one more month. Nevertheless, the June OPEC+ meeting might be canceled since Iraq and Nigeria still have not reached the agreed targets on deepening their production. Due to the non-compliance of some OPEC members, the balance in the oil market could be disrupted again. That is why OPEC + leaders have issued an ultimatum to other members of the deal.

Oil prices immediately plunged to $40 per barrel. Unless the participants observe the terms of the deal, the production volume will increase by 2 million barrels per day in July. This will put more pressure on the energy market which has just begun to revive from the consequences of COVID-19.

The online conference is unlikely to take place tomorrow. If Iraq and Nigeria do not fulfill the requirements of the deal, the OPEC + meeting scheduled for June 9-10 might be cancelled.