The current trade wars going on between major economies like China, Russia, the U.S, and Saudi Arabia will decide the fate of global trade across the globe. This trade war also has its own political agenda as it also involves their national leaders. Currently, Russia and Saudi Arabia are facing a tough time. The International Energy Agency has scheduled the publishing of its oil market forecast for 2020. The OPEC+ needs to extend its output cuts into a new year or else the stockpiles will be rising next year.
This is getting petroleum and energy organizations all over the world worried. If the demand for oil weakens further, it will be difficult for the producers as they will have to deepen the cuts. This will result in an unpleasant partnership end between Russia and Saudi Arabia.
OPEC agreed upon a restrained production for oil in November 2016 along with a group of other countries. Russia willingly offered a reduction then. It was all with an objective of draining extra inventory and balance out supply and demand globally. But, this could not be achieved in spite of increased global oil consumption demand which satisfactory through 2017 and 2019. The average rate of increase then was more than 1%. This is almost equal to more than 1 million barrels per day a demanding year.
The International Energy Agency has already given its estimates for the first quarter of 2019 and will release the rest soon. IEA is making a big cut as far as the consumption is concerned. It may get cut further and if this happens the situation will be worrisome. In a recently held International Economic Forum in Russia, oil minister of Russia Mr. Alexander Novak said that the current trade war will only uplift the oil demand globally.