Saudi Arabia and Russia agreed today to what could be the biggest organized oil production cuts in decades, The Wall Street Journal reports.
On a worldwide teleconference with OPEC members and other oil-producing countries, the two nations agreed to cut output by almost one-third. The news comes after a monthlong battle between the top oil producers that led to plummeting oil prices as low as $20 a barrel last month.
According to the WSJ, the one-third cut amounts to 4 million barrels of oil a day for Saudi Arabia and 2 million barrels a day for Russia.
The goal, however, remains to cut a total of 20 million barrels a day from the global supply. With today’s agreement, there’s still another 14 million barrels to go.
Other nations including Iraq have yet to agree on how much they would scale back production.
Meanwhile, the WSJ reports worldwide oil consumption is expected to decrease by as much as 30 million barrels a day in April.
The U.S. is not expected to mandate any production cuts. President Donald Trump is said to believe reductions will occur naturally due to the erosion of demand.
“The supply and demand fundamentals are horrifying,” OPEC Secretary-General Mohammed Barkindo said on the call.
The decline in the second quarter alone would be “close to 12 million [barrels a day] and expanding,” he said, calling it “unprecedented in modern times.” Read the full story.
