Top oil-producers agreed Sunday on “historic” output cuts in a bid to boost plummeting oil prices due to the new coronavirus crisis and a Russia-Saudi price war.
OPEC producers dominated by Saudi Arabia and allies led by Russia met via videoconference for an hour Sunday in a last effort to cement a deal struck early Friday.
Mexico’s involvement in the deal led to a compromise being reached.
Mexico’s Energy Minister Rocio Nahle said the oil producers agreed to a cut of 9.7 million barrels per day from May.
The deal was down slightly from 10 million barrels per day envisioned earlier.
OPEC Secretary General Mohammad Barkindo called the cuts “historic”.
“They are largest in volume and the longest in duration, as they are planned to last for two years,” he said.
The agreement between the Vienna-based Organization of the Petroleum Exporting Countries and partners foresees deep output cuts in May and June followed by a gradual reduction in cuts until April 2022.
Barkindo added that the deal “paved the way for a global alliance with the participation of the G20”.
Following extensive efforts “we announce completing the historical agreement”, Kuwait Oil Minister Khaled al-Fadhel tweeted.
Saudi Energy Minister Prince Abdulaziz bin Salman, who chaired the meeting together with his Russian and Algerian counterparts, also confirmed that the discussions “ended with consensus”.
US President Donald Trump welcomed a “great deal for all”, saying on Twitter it would “save hundreds of thousands of energy jobs in the United States”.
He added he “would like to thank and congratulate” Russian President Vladimir Putin and Saudi Crown Prince and de facto leader Mohammed bin Salman, both of whom he had spoken to.
The Kremlin in a statement confirmed the joint phone call, adding that Putin and Trump agreed on the “great importance” of the deal.
Initial reticence from Mexico to introduce output cuts had led to a standoff that cast doubt on efforts to bolster oil prices, pushed to near two-decade lows.