Today’s Pickup: Saudi Arabia and Russia to increase production to bring down oil price

 Photo: Shutterstock
Photo: Shutterstock

Good day,

News broke out that Russia and Saudi Arabia have struck a secret deal last month over increasing oil production to quench the simmering oil prices. President Trump has repeatedly spoken against the OPEC for the rise in crude oil price, and has called out for an increase in oil production before the U.S. congressional elections next month.

Even before the deal was set in place, Russia and Saudi Arabia have been progressively pushing the pedal on oil production rate after the debacle in Venezuela and the ongoing trade embargo scare with Iran – two of OPEC’s once-dominant members. Regardless, the efforts seem to have not been enough as the crude oil price is now over $85 per barrel.

The idea is to increase production by half a million barrels per day in total, but a formal announcement has not been made yet, supposedly being reserved for a full-OPEC meeting to be held in December.

Did you know?

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In other news:

Online orders force supermarkets to rethink their stores

New layouts, curbside pickup zones, round-the-clock restocking help retailers handle new shopping patterns. (The Wall Street Journal)

ExxonMobil announces mutually compatible 0.5% sulfur bunker fuel blends

ExxonMobil has announced its range of new 0.5% sulfur marine fuel blends will be compatible with each other, alleviating one of the shipping industry’s biggest concerns about compliance with tighter sulfur limits in 2020 and raising the possibility these fuels will be sold at a premium to other 0.5% sulfur blends. (S&P Global)

Trucking, shipping groups dig into USMCA changes

North America’s new trade agreement is being greeted with a sigh of relief by transportation industry lobbyists and analysts alike. (Today’s Trucking)

Want a more sustainable supply chain? L’Oreal says avoid air freight

To make the biggest dent in carbon emissions, L’Oreal found that reducing reliance on air freight provides an outsized impact. (Supply Chain Dive)

Amazon Warehouse Workers Lose Bonuses, Stock Awards for Raises

Amazon Inc. is eliminating monthly bonuses and stock awards for warehouse workers and other hourly employees after the company pledged this week to raise pay to at least $15 an hour. (Bloomberg)

Final thoughts:

The ongoing U.S.-China trade war has turned for the worse, as the crude oil shipments to China from the U.S. have totally stopped, as reported by the president of China Merchants Energy Shipping Co (CMES) yesterday. Unlike other commodities, oil exports to China are relatively recent, starting only in 2016, but had the impetus to turn into a viable business in quick time.

Although there have been no actual embargo on U.S. oil export to China, it can be seen that the Chinese importers are looking for a more stabler country to trade with for its oil needs. This does not bode well to the trade relationship of the two economic powerhouses, and in the long run could also affect the shipping industry greatly.

Hammer down everyone!  

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Vishnu Rajamanickam, Staff Writer

Vishnu writes editorial commentary on cutting-edge technology within the freight industry, profiles startups, and brings in perspective from industry frontrunners and thought leaders in the freight space. In his spare time, he writes neo-noir poetry, blogs about travel & living, and loves to debate about international politics. He hopes to settle down in a village and grow his own food at some point in time. But for now, he is happy to live with his wife in the middle of a German metropolitan.