Historic Deal reached! 13.5 Million barrels cut. The world’s top oil producers pulled off a historic deal to cut global crude output and put an end to a devastating price war.
After a week-long marathon of bilateral talks and four days of video conferences with government ministers from around the world -- including the OPEC+ alliance and Group of 20 nations -- an agreement finally emerged to tackle the impact of the global pandemic on demand.
The talks almost fell apart because of resistancefrom Mexico, but came back from the brink after a weekend of urgent diplomacy -- as the clock ticked down to the market open. OPEC+ will cut 9.7 million barrels a day -- just below the initial proposal of 10 million. The U.S., Brazil and Canada will contribute another 3.7 million barrels as their production declines. OPEC officials were still waiting to hear more from Group of 20 members -- though it’s not clear if those numbers will represent real cuts or just production idled because of market forces.
Mexico appeared to have won a diplomatic victory as it will only be required to cut 100,000 barrels -- less than its pro-rated share.