Oil price war ends with ‘historic’ deal to cut output

(AFP): The world’s top oil producers have agreed on a [historic] deal to slash global output by about 10 percent to prop up prices hammered by the coronavirus crisis and a Russia-Saudi price war.

After a week-long marathon of bilateral calls of ministers from the OPEC+ alliance and the Group of 20 nations, an agreement finally emerged that put an end to the devastating price war between Saudi Arabia and Russia.

The deal is the largest cut in oil production ever to have been agreed upon. OPEC has yet to announce the deal, but individual nations have confirmed it.

However, according to the provided details, 9.7 million barrels per day will be cut by OPEC oil producers and allies.

OPEC+ made up of oil producers and allies including Russia, announced plans for the deal on 9 April, but Mexico resisted the cuts.

United States President Donald Trump and Kuwait’s energy minister Dr. Khaled Ali Mohammed al-Fadhel confirmed the news through Twitter.

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

Kuwait’s energy minister took to Twitter and said, “By the grace of Allah, then with wise guidance, continuous efforts and continuous talks since the dawn of Friday, we now announce the completion of the historic agreement to reduce production by approximately 10 million barrels of oil per day from members of ‘OPEC +’ starting from 1 May 2020.”

بفضل من الله ثم بالتوجيهات الحكيمة والجهود المتواصلة والمحادثات المستمرة منذ فجر الجمعة،
نعلن الآن عن اتمام الاتفاق التاريخي على خفض الانتاج بما يقارب 10 ملايين برميل من النفط يومياً من اعضاء “اوبك +” ابتداء من الأول من مايو 2020 pic.twitter.com/NF3o5Hmt6z

— د. خالد الفاضل (@Dr_Alfadhel) April 12, 2020

In this regard, in Asia today (Monday), oil rose over $1 a barrel in early trading with global benchmark Brent up 3.9 percent to $32.71 a barrel and US grade West Texas Intermediate up 6.1 percent to $24.15 a barrel.

In Australia, shares jumped 3.46 percent led by energy exporters; however, Japan’s Nikkei 225 fell 1.35 percent on continued concerns of poor global demand because of the coronavirus.

Earlier, global oil demand is estimated to have fallen by a third as almost half of the world is under lockdown due to the coronavirus outbreak. Through which oil prices slumped in March to an 18-year-low after OPEC+ failed to agree on cuts.