The price war between Russia-Saudi Arabia comes to an end with one of the biggest oil cuts in production on Sunday, as the white knight U.S. President Donald Trump takes a step to stabilize the oil sector badly affected by the coronavirus pandemic.
Plans from the OPEC+ oil cartel and its allies to reduce the global oil production by around 10 million barrels a day for the months May and June could mean a near 10% drop in the production. Whether or not this “historic move” would bolster crude prices is a different story, the deal is expected to bring some relief to the economies of the Middle East countries, Africa, and certain oil firms of America.
The agreement took place on Easter weekend over repeated calls involving Mr. Trump, Mexican President Andrés Manuel López Obrador, the Saudi crown prince Mohammed bin Salman, and Russian president Vladimir V. Putin, among others.
Donald Trump welcomed the announcement, saying the deal could protect thousands of energy jobs in the U.S., as he congratulated Saudi and Russia. Majority of the cuts will be absorbed by Saudi Arabia and Russia as each of the countries will cut production by 2.5 million barrels a day.