Saudi Arabia submits to oil output cut after US threat

OPEC and other large oil producers led by Russia have approved a deal to cut output, after the US threatened to take measures against Saudi Arabia over its crude price war with Moscow.

According to Press TV, the deal, agreed late Sunday, is aimed at boosting oil prices that have fallen to a more than 18-year low amid the coronavirus pandemic which has destroyed demand for fuel.

OPEC+, a grouping including OPEC and allies, said it had agreed to cut output by 9.7 million barrels per day (bpd) for May and June.

According to OPEC+ sources, the total global oil cuts could amount to more than 20 million bpd, or 20 percent of global supply, effective May 1.

Total global reductions will include steeper voluntary cuts by some OPEC+ members and strategic stocks purchases by the world's largest consumers.

The signing of the deal had been delayed since Thursday after Mexico refused to agree to its share of the reductions proposed by OPEC+.

OPEC+ sources said non-members Brazil, Canada, Indonesia, Norway and the US would contribute to the cuts.

President Donald Trump hailed the deal which he desperately pushed for because low prices have been wreaking a havoc with US shale industry which involves higher costs.

Trump took to Twitter to thank Russian President Vladimir Putin and Saudi King Salman for the deal. "I just spoke to them... Great deal for all," he wrote. 

The US president had threatened Riyadh with oil tariffs and other measures if it did not fix the oil market's problem of oversupply.

A group of 13 US senators from oil producing states had served Saudi Arabia a portentous warning, saying the kingdom would lose its lifeline on Capitol Hill and face anti-Saudi legislation flourishing if it did not agree to a cut. 

ME