OPEC, allies agree to cut oil output by record amount

OPEC, Russia and other oil-producing countries, collectively known as OPEC+, have reached a tentative deal to cut oil output by 9.7 million barrels a day due to the coronavirus pandemic.

Talks between the countries had hit a last-minute hurdle last week when Mexican President Andrés Manuel López Obrador appeared reluctant to cut his country’s production levels. But Mexico’s energy secretary confirmed Sunday that a deal had been reached.

México agradece todo el apoyo de los países de la ⁦@OPECSecretariat⁩ en la reunión extraordinaria realizada el día hoy. El acuerdo unánime de los 23 países participantes dará de inicio una reducción en la plataforma petrolera de 9.7 millones de barriles a partir de Mayo. pic.twitter.com/izkMLoYpni

— Rocío Nahle (@rocionahle) April 12, 2020

President Trump confirmed Sunday that a deal had been reached.

The big Oil Deal with OPEC Plus is done. This will save hundreds of thousands of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office. Great deal for all!

— Donald J. Trump (@realDonaldTrump) April 12, 2020

The countries’ delegations are set to hold an emergency meeting Sunday evening to finalize talks, Azerbaijan’s energy minister said, telling CNBC the meeting will be chaired by the Russian and Saudi energy ministers.

The agreement falls just below the initial proposal of 10 million barrels cut per day, with the U.S., Brazil and Canada contributing another 3.7 million barrels, Bloomberg reported. OPEC representatives were still waiting to hear back from other Group of 20 members as of Sunday afternoon. Mexico will only be required to cut 100,000 barrels, according to the outlet.

Prices have fallen 40 percent since March in response to an impasse between Saudi Arabia and Russia on a potential emergency plan to address the pandemic’s effect on oil market supplies, which in turn prompted a price war between the two nations.

While the two reached an agreement last week, Saudi Arabia had also been under pressure from President Trump to reach a compromise with Mexico.

As recently as Thursday, Mexican Energy Minister Rocío Nahle would only commit to a third of the 350,000 barrels a day Saudi Arabia asked Mexico to cut, the Wall Street Journal reported.