The ongoing coronavirus pandemic and the continuous toll it is taking on the global economy seemed to have pushed Russia into negotiations with Saudi Arabia on oil prices.
As per Radio Free Europe Radio Liberty, Russian President Vladimir Putin is not too keen to have a price war with Saudi Arabia over oil. "For our economy, yes definitely, this is a very serious challenge," Putin told Audit Chamber head Aleksei Kudrin on April 1. The premier added that the United States would also suffer in the process.
Analysts were of the opinion that Putin's comments are a sign that Russia is keen to reach an agreement with Saudi Arabia. "Today's acknowledgment by Putin shows Russia is interested in the dialogue process and wants to go ahead with it," said Rauf Mammadov, an energy analyst at the Middle East Institute in Washington.
Low oil prices are not profitable for both countries say analysts as both Russia and Saudi Arabia want to expand their budgets.
"Despite the bravado that we have been hearing on both sides, this is not about who has the lowest cost of production and higher profitability. This is about funding budgets, and for both Russia and Saudi budget expansion has been significant in recent years," said Chris Weafer, the co-founder of Macro Advisory in Moscow.
"The reality is that both of them need a deal to put better price support in place."
Putin and his US counterpart Donald Trump have also agreed during a phone call on Monday that the current situation on world oil markets suited neither, the Kremlin.
Trump in a tweet has said that Trump said he had spoken to Saudi Crown Prince Mohammed bin Salman and expects Saudi Arabia and Russia to cut oil output by as much as 10 million to 15 million barrels, as the two countries signaled a willingness to make a deal.