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12 Apr, 2020 21:05

‘Great day for all’ – Trump hails OPEC production cuts, thanks Putin and Saudi king

‘Great day for all’ – Trump hails OPEC production cuts, thanks Putin and Saudi king

President Donald Trump has congratulated his Russian and Saudi counterparts on signing a deal to cut global oil output, saying the move will save “hundreds of thousands of energy jobs in the United States.”

Cheering on the “big oil deal” signed on Sunday, Trump sent his thanks and congratulations to “President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office. Great deal for all!” 

The deal, agreed upon by the Organization of Petroleum Exporting States and several other oil producers known as OPEC+, will see the signatories cut their collective output by 9.7 million barrels per day (bpd) for two months, in a bid to shore up the global energy market against the reduced demand created by the coronavirus pandemic.

The agreement also brings to an end a price war that had been raging between Russia and Saudi Arabia, after the latter pulled out of a previous agreement last month and ramped up production. Russian President Vladimir Putin accused the Saudi kingdom of driving prices down to force competing shale oil producers, including the US and Russia, out of business.

Also on rt.com OPEC+ strikes last-minute deal to cut almost 10 mn barrels a day of oil production

A growth in shale oil extraction has seen the US become the world’s largest crude oil producer in recent years. However, American firms need an oil price of around $40 to turn a profit. With prices bottoming out at less than $20 at the beginning of April, Trump repeatedly pressed his Saudi Allies to cut a deal with Russia and limit production.

The fall in prices, however, presented Trump with a convenient opportunity to top up the US’ national oil reserves. As the market tumbled last month, Trump announced at a press conference that he had ordered US energy officials to buy the dip and “fill it right up to the top.” 

The US is the world’s largest oil producer, but so far it hasn’t pledged any cuts in production, saying the fall in prices will trigger a scale-back by itself.

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