It's not impossible, but it does remain unlikely, according to Fitch Solutions Country Risk and Industry Research.

It’s not impossible, but it does remain unlikely.

That’s according to analysts at Fitch Solutions Country Risk and Industry Research, who outlined the view in a report sent to Rigzone on Monday.

“From the perspective of both Saudi Arabia and Russia, such a deal would represent a major strategic win,” the analysts stated in the report.

“The stumbling block comes on the U.S. side, where the support for such an accord is currently lacking among both regulators and producers,” the analysts added.

“Such coordinated action could be mandated by the government. However, the technical feasibility of such a cut has already been called into question and, without the support of key producers, its implementation and enforcement would almost certainly fail,” the analysts continued.

In addition, the analysts outlined that it is unclear how long it would take to negotiate and then enact an agreement between the three countries, as well as other OPEC and non-OPEC producers.

Unless a new production cut deal can be brokered soon, oil prices look set for “renewed and deep declines” this quarter, according to the analysts.

“The second quarter likely marks the nadir for global oil markets, after which Covid-19 containment measures should be rolled back, opening the door on a recovery in demand,” the analysts stated in the report.

“That said, the timing, pace and strength of such a recovery is by no means assured and, in our view, new social behaviors will likely prove sticky,” the analysts added.

Oil prices crashed last month after OPEC+ failed to reach a deal on production cuts at their last meeting. Bloomberg reported today that a new OPEC+ meeting was scheduled for Monday but got pushed back to Thursday.

Fitch Solutions Country Risk and Industry Research is a division within Fitch Group.

To contact the author, email andreas.exarheas@rigzone.com