OPEC, Russia Make 'Unprecedented' Oil Move

A tenth of global supply is going bye-bye
By Newser Editors and Wire Services
Posted Apr 12, 2020 3:30 PM CDT
OPEC, Russia Kiss and Make Up
In this photo released by Saudi Energy Ministry, Prince Abdulaziz bin Salman Al-Saud, Minister of Energy of Saudi Arabia, third right, chairs a virtual summit of the Group of 20 energy ministers at his office in Riyadh, Saudi Arabia, Friday, April 10, 2020.   (Saudi Energy Ministry via AP)

(Newser) – OPEC, Russia, and other oil-producing nations on Sunday finalized an unprecedented production cut of nearly 10 million barrels, or a tenth of global supply, in hopes of boosting crashing prices amid the coronavirus pandemic and a price war, officials said. The cartel and other nations agreed to allow Mexico to cut only 100,000 barrels a month, a sticking point for an accord initially reached Friday after a marathon video conference between 23 nations, the AP reports. They reached the deal just hours before Asian markets reopen Monday as international benchmark Brent crude traded at just over $31 a barrel and American shale producers struggle. Mexico's energy minister said on Twitter that the group of nations agreed to cut 9.7 million barrels a day to begin May 1.

Energy officials from other countries shared similar information. Video aired by the Saudi-owned satellite channel Al-Arabiya showed the moment that Saudi Energy Minister Prince Abdulaziz bin Salman, a son of King Salman, assented to the deal. "I go with the consent, so I agree," the prince said, chuckling, drawing a round of applause from those on the video conference call. But it had not been smiles and laughs for weeks after OPEC+ failed in March to reach an agreement on production cuts, sending prices tumbling. Saudi Arabia sharply criticized Russia days earlier over what it described as comments critical of the kingdom. An earlier agreement by OPEC+ to lower production collapsed due to a disagreement between the two nations, which sparked a price war, per Reuters.

(Read more OPEC stories.)

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