The Russian president and members of the cabinet and oil industry officials met via videoconference on Friday to discuss the situation on the global energy markets. Oil prices suffered their worst decline in decades in March after Russia and Saudi Arabia failed to reach a deal on output cuts amid the ongoing COVID-19 crisis.

The current slump in demand for oil could lead to shortages in the future when the global economy enters a period of economic recovery, Russian President Vladimir Putin has said.

"Demand will inevitably begin to recover, and a situation of an acute shortage of oil may arise, with all the negative consequences for the world economy [that go with it], because prices may skyrocket," Putin said, speaking to officials and oil industry representatives on Friday. Putin added that it was the world's common interest to avoid such a scenario.

Today, the situation on energy markets remains difficult, with demand continuing to fall, Putin noted. This undermines investments and threatens the workforce, and Russia would prefer long-term stability on the oil market, he added.

"I want to emphasize that our country has always advocated and is advocating for the long-term stability of the oil market, taking into account the positions of both producers and consumers," Putin said.

According to the Russian president, the current situation poses not only economic risks, but technogenic and ecological ones as well. Putin noted that he spoke to US President Donald Trump about the energy markets situation earlier this week, and that both sides expressed concerns.

Putin said Russia would be comfortable with oil prices in the $42 per barrel range, which would allow the country to maintain a balanced budget, and was prepared for joint actions on oil markets to stabilizes prices, including willingness to work with the United States on the issue. Moscow also maintains close contact with Saudi Arabia, Putin said.

The Russian president estimated that the world needs cuts of around 10 million barrels per day for prices to stabilize, and that cuts should be made from  Q1 2020 output levels. Russia is prepared to play its part to restore balance to the energy market, the president said.

Russia Not Interested in Wiping Out Competitors

At the meeting, Russian Energy Minister Alexander Novak said some countries' decision to flood the market have put a major dent in prices, adding that it was 'unfortunate' that Saudi Arabia announced plans to boost production. Novak noted that Saudi Arabia continues to negatively influence the oil market.

Putin agreed that Saudi Arabia's move to scrap the OPEC+ deal on cuts was one of the reasons for the sharp drop in prices, with declining demand amid the COVID-19 pandemic being the other major factor. He emphasized that it was not Russia that initiated the collapse of the OPEC+ deal.

Putin suggested that Riyadh seems to have been trying to rid itself of competitors, particularly US shale oil, but added that Russia does not need this.

The energy minister agreed that everyone, including Saudi Arabia and the US, would need to cut back production for prices to stabilize, with the cuts needing to last for at least several months, with output resuming gradually after that.

Putin asked Novak to come up with a balanced decision on the matter, taking into consideration the common interests of all partners.

OPEC+ Meeting Scheduled April 6

Also on Friday, an OPEC source told Reuters that the cartel and its agencies were working on an 'unprecedented' cut in production equivalent to about 10 percent of the total global oil supply. A meeting of OPEC+ including Russia has been scheduled for Monday, with Novak confirming to Putin that the talks have been arranged.

Oil prices took a nosedive in early March, after OPEC+ members failed to reach an agreement on output cuts amid the COVID-19 crisis, which has led to a global downturn in economic activity. Russia proposed leaving output cuts at previously agreed upon levels, while Saudi Arabia and its allies suggested that additional cuts be made. Russia rejected the proposal, prompting Riyadh to cancel even the originally agreed upon cuts, to announce a 25 percent increase in production, and to offer heavy discounts on crude futures for April. Other countries including Russia followed suit in ramping up output, bankrupting at least one US shale producer, and leaving Moscow and Riyadh eating into their national reserve funds.

Texas Oil Regulator Says Had 'Great" Talk With Russia's Energy Minister

Texas Railroad Commissioner Ryan Sitton said in a statement on Thursday that he had a great conversation with Russian Energy Minister Alexander Novak and that both sides agreed on engaging in an unprecedented level of cooperation due to the economic impact of the coronavirus (COVID-19) pandemic.

Sitton said they agreed the new coronavirus pandemic requires an "unprecedented level of cooperation" and discussed 10 thousand barrels per day out of global supply.

Sitton said he will soon speak with Saudi Energy Minister Prince Abdulaziz bin Salman.

The Railroad Commission of Texas is an agency that regulates the oil and gas industry in the state of Texas.

Oil prices jumped after US President Donald Trump said he expected Russia and Saudi Arabia to take 10 billion barrels of daily oil supplies from the market. Brent oil futures were up 40 percent, peaking at $35.99 on Thursday, but have retreated since to about $30 per barrel.

It was reported later that Saudi Arabia is considering the possibility of cutting oil output to below nine million barrels per day, so long as any output reductions are reciprocated by other G20 countries.

According to the Wall Street Journal citing officials in Riyadh, the move comes after Saudi Arabia's oil output has continued to rise, despite falling prices on the world market. Riyadh is examining the possibility of reducing output from 12 million barrels per day to below nine million barrels daily, should other G20 nations follow suit, the newspaper cited sources as saying.

Over recent months, Saudi Arabia's oil production has remained consistent at roughly 9.7 million barrels per day, according to official OPEC reports. Riyadh decided to ramp up production as the OPEC+ oil output cut deal expired on Tuesday.

Crude prices first plummeted in early March after OPEC+ exporters failed to agree on additional cuts or extend the deal limiting their production, dealing a blow to the market weakened by a fall in demand during the pandemic.

Moreover, Saudi Arabia and Russia failed to reach a deal on oil production cuts at the March meeting, triggering an oil price war, with Riyadh vowing to flood the market with oil and reportedly starting offering barrels to European customers at huge discounts.