At Trump’s Urging, Oil-Producing Nations Cut Production To Stabilize Oil Prices
In a joint effort to stabilize oil prices to assist global financial markets, Russia, Saudi Arabia and the United States agreed to the largest cut in production ever negotiated.
President Donald Trump, who’s facing re-election, a weakening economy and American oil companies struggling with deflating oil prices, took the unprecedented step of joining Russia and Saudi Arabia in cutting production in order to raise prices.
It’s unclear whether or not the synchronized move by the three nations will be enough to stabilize oil prices around the world. One hundred million barrels of oil daily fuel global commerce. Now the demand is down about 35 percent because of the coronavirus.
The plan by the Organization of the Petroleum Exporting Countries (OPEC) will cut 9.7 million barrels daily. That’s almost 10 percent of the world’s output.
The deal was intended to relieve struggling economies in the Middle East, Africa, and oil companies around the world. Those companies include American firms, which directly and indirectly employ 10 million workers.
Trump celebrated the deal, tweeting that it would “save hundreds of thousands of energy jobs in the United States.” He did not address the additional costs to U.S. consumers of higher gas prices.
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