The 13 nations in the Organization of Petroleum Exporting Countries (OPEC) reached agreement with Russia, Mexico, the United States and seven other major oil producers Sunday to cut production by a combined 9.7 million barrels a day in May and June. President Trump resolved an impasse between Saudi Arabia and Mexico that threatened to sink the agreement, intended to raise oil prices as demand plummets amid the COVID-19 coronavirus pandemic. The cuts, if implemented, would reduce global oil supply by about 13 percent.
Trump, who has long criticized OPEC for raising U.S. gas prices, tweeted Sunday that “the big oil deal with OPEC plus” will “save hundreds of thousands of energy jobs in the United States,” and he thanked Russian President Vladimir Putin and Saudi King Salman. As part of the deal, the U.S. agreed to cut 300,000 barrels a day, making up for Mexico’s shortfall, The Wall Street Journal reports, though “it couldn’t be determined whether that was in addition to other U.S. cuts, or how the U.S. cuts would be implemented.” Analysts are also skeptical the cuts will be enough to shore up oil prices.
Overall, the U.S., Brazil, Canada, and other non-OPEC countries will cut production by four million to five million barrels a day, OPEC said. Canada wasn’t asked to cut production but would let market forces curtail its supply, Alberta’s energy minister said. Oil prices plummeted 40 percent since early March amid a crash in demand and a price war between Saudi Arabia and Russia that now appears to be resolved.
More stories from theweek.com
Trump adviser Peter Navarro made a bad bet 60 Minutes didn’t cover pandemic preparedness under Obama
John Oliver doesn’t want America to go ‘back to normal’ after the coronavirus pandemic
Trump says disaster declarations in all 50 states means ‘we are winning’ the fight against the coronavirus