In a historic agreement, OPEC+ alliance has decided to slash the oil production by about 20 million barrels per day contrary to 9.7 million barrels as reported earlier, President Donald Trump said on Monday. Indicative that he brokered the deal, Trump quoted the figures the double to what was made public of the negotiation taking to his official handle on Twitter. Furthermore, he thanked Russia and Saudi Arabia for resolving a month-long price war that inflated gasoline prices for the US markets.
Due to the slump in the economy during the coronavirus pandemic, production decline in the US, Brazil, and Canada will be counted in the agreement. An estimated decline of 2.8 million barrels per day in Iran, Venezuela, and Libya will also be included, as per media reports. "Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day, not the 10 Million that is generally being reported," Trump tweeted. "Thank you to all of those who worked with me on getting this very big business back on track, in particular Russia and Saudi Arabia." OPEC plus chaired by Saudi Arabia and allies led by Russia conducted a meeting on videoconference to reach a global deal.
In a bid to limit a crash in prices, Oil-producing countries had reportedly decided to formulate a tentative deal to pump less crude to the consumers to prevent straining government budgets and rescue energy suppliers out of bankruptcy. “They’re getting close to a deal that’s OPEC and many other countries outside of OPEC, and we’ll see what happens,” Trump was quoted as saying at a White House News Conference. “There’s so much production nobody even knows what to do with it, that’s how it’s working” he added.
Mike Sommers, President of American Petroleum Institute, which constituted majority U.S. oil and gas producers among its members said, “While this move will help stabilize world oil markets, significant challenges remain throughout the supply chain since current market disruptions are driven largely by this historic drop in demand as a result of the COVID-19 pandemic,” US media reported. However, earlier, Kuwait’s Oil Minister Khaled al-Fadhel was quoted as saying, “At the meeting for the OPEC group that ended at 3 am, Mexico disrupted the agreement of all the countries to reduce the production of oil by 10 million barrels a day.”
Mexico’s Energy Minister, Rocío Nahle, wrote on his official handle on Twitter saying that Mexico proposed cutting its output by 100,000 barrels a day for the next two months. However, there was no immediate official response from the government of Mexico.