Trump says he brokered deal with Saudi Arabia, Russia for huge oil cuts
Updated: 2020-04-03 09:53:42 KST
There has been a massive drop in oil prices due to the global outbreak of COVID-19, but U.S. President Donald Trump on Thursday tweeted that he had brokered a deal with Saudi Arabia and Russia, to cut output and arrest the price rout.
President Trump said he spoke with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman,.. adding the two nations are expected to cut output by 10 million barrels a day.
That amount represents about one-tenth of global supply.
While President Trump signaled the cuts could amount to as much as 15 million barrels a day, there was no mention on whether the U.S., the world's largest oil producer would contribute to the reductions, as such move is forbidden by U.S. antitrust legislation.
Russia's Energy Minister Alexander Novak said Thursday that Moscow was no longer planning to raise output, and is ready to cooperate with OPEC and other producers to stabilize the market.
On the same day, Saudi Arabia called for an emergency meeting of OPEC and non-OPEC oil producers, saying it also wants to reach a fair agreement to stabilize the market.
Over the past few weeks, global oil demand has dropped by a third, or roughly 30 million barrels a day, as some 3 billion people have been put on lockdown in a bid to slow the spread of COVID-19.
The sharp decline in demand sent oil prices to their lowest levels since 2002, close to 20 U.S. dollars a barrel.
The price drop dealt a huge blow to the U.S. shale oil industry, which cannot compete at such low prices.
President Trump's announcement of a looming deal sent crude prices soaring by up to 45-percent at one point during trading on Thursday.
Lee Seung-jae, Arirang News.