Opec+ agrees deal to cut global oil production

Opec and Russia have agreed a deal to cut global oil production to 10 million barrels a day until July 1, and then eight million a day until the end of year, Saudi state TV has reported.

The move is aimed at limiting a crash in prices that has pushed energy companies toward bankruptcy.

The producers met via video conference into the early hours, but other reports suggested the deal was was hanging in the balance, with Kuwait’s oil minister saying Mexico had disrupted the proposed accord.

Saudi state television reported the terms of the deal on Friday, adding that it also called for a six million barrel per day cut for 16 months beginning in 2021.

Oil prices have collapsed amid the coronavirus pandemic.

US President Donald Trump earlier said he had spoken with Russian President Vladimir Putin and King Salman of Saudi Arabia about the negotiations.

“They’re getting close to a deal, that’s Opec and many other countries outside of Opec, and we’ll see what happens,” he said at a White House news briefing.

“There’s so much production nobody even knows what to do with it, that’s how it’s working,” he added.

Reports of a deal were welcomed by the American Petroleum Institute, which counts most US oil and gas producers among its members.

“While this move will help stabilise world oil markets, significant challenges remain throughout the supply chain since current market disruptions are driven largely by this historic drop in demand as a result of the Covid-19 pandemic,” said API president Mike Sommers, president of API.

But by early Friday, Kuwait Oil Minister Khaled al-Fadhel suggested the deal was not yet done.

“At the meeting for the Opec group that ended at 3am, Mexico disrupted the agreement of all the countries to reduce the production of oil by 10 million barrels a day,” he wrote, without elaborating.

There was no immediate response from Mexico, though its energy minister, Rocio Nahle, posted on Twitter around the same time that his country proposed cutting its output by 100,000 barrels a day for the next two months.

Reference: Yahoo News