Many in the group of oil producers wanted Saudi Arabia to move on and agree to a small production cut from Mexico.
Photo: daniel becerril/ReutersSaudi Arabia, Russia and the U.S. have agreed to lead a multinational coalition in major oil-production cuts after a month-long Saudi-Russian feud and a drop in demand due to the coronavirus crisis devastated oil prices. The deal, sealed Sunday, came after President Trump intervened to help resolve a Saudi-Mexico standoff that jeopardized the broader pact.
As part of the deal, 23 countries committed to collectively withhold 9.7 million barrels a day of oil from global markets. The unprecedented agreement is designed to address a mounting oil glut resulting from the pandemic’s erosion of oil demand.
On a hastily convened conference call Sunday with delegates from the 13-nation Organization of the Petroleum Exporting Countries and other nations including Russia, participants raced to strike a deal before oil markets opened on Monday. They expected oil prices to crash on Monday if no agreement had been clinched.
Mr. Trump and his representatives were not present at the meeting. Still, the American president’s presence loomed large. Mr. Trump had intervened with Saudi Arabia and Mexico and helped to settle the dispute.
Under the final deal announced Sunday, Mexico will cut 100,000 barrels per day of output, some 250,000 barrels fewer than Saudi Arabia initially wanted. The U.S. unlocked the standoff by pledging to compensate the Mexican amount with 300,000 barrels of reductions of its own, the delegates were told.
“Trump is the best OPEC negotiator now,” said a delegate at Sunday’s meeting.
It remains unclear how the U.S. cuts would be carried out. Participants were also told the U.S., Canada and Brazil will hold back as much as 3.7 million barrels a day but some of the reductions will be market-driven losses.
Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com
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