The huge impact on the U.S. energy sector has led Washington to try to negotiate an agreement between Saudi Arabia and Russia. The price war came after a failed agreement between the two countries last month on production cuts in response to falling demand. 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.   Many analysts and investors are optimistic that there will be some kind of agreement, but Stephen Schork, founder of the energy newsletter The Schork Report, is not one of them. He projected that the U.S. could cost wTI to a figure. The Russian government had originally forecast a surplus of 930 billion rubles ($11.4 billion) in 2020, but after the outbreak of the price war, it said it expected a deficit.
The ruble fell after falling more than 30 percent between early 2020 and March 18.  Last week, crude oil prices rose after U.S. President Donald Trump hinted that a deal was imminent. The deal calls for a reduction of 5 million barrels per day between Saudi Arabia and Russia, with the remaining 5 million being operated by the remaining OPEC nations plus, reports the Financial Times. The reductions will be phased out by April 2022. This year, Saudi Arabia is chairing the G20, giving Livingston optimism that there will still be an agreement. “I think it makes it a little too big to fail,” he said. At the same time, months of oil price wars between Saudi Arabia and Russia have left the world market with far more crude oil than is needed. Later, on 3 April, the Saudi foreign and energy ministers issued statements criticizing Putin and accusing Russia of not participating in the OPEC agreement.  Prior to the opening on March 9, 2020 (Monday), the Dow Jones Industrial Average futures market fell by more than 1,300 points and suspended trading due to a combination of coronavirus concerns and the oil price war. On Monday, March 9, 2020, global stock markets experienced a significant drop due to a combination of panic over the COVID 19 pandemic and the price fight between Saudi Arabia and Russia. The Dow Jones fell above 2,000 points or 7.8%, exceeded the futures market forecasts and became the biggest loss of points in its history.  Other stock markets were also affected: the S-P 500 contracted by 7.6% and the NASDAQ Composite by 7.2%. Italy`s FTSE MIB suffered the biggest percentage decline and the index fell 11%.  In the United States, circuit breaker drops were triggered to avoid a stock market crash, resulting in 15-minute pauses.  This week, the federal government released its latest short-term outlook.