U.S. President Donald Trump on Thursday said he had spoken to Saudi crown prince Mohammed bin Salman and that he expects Saudi Arabia and Russia to cut oil output by as much as 15 million barrels per day, as the two countries signaled willingness for a deal.
In a pair of tweets, Trump initially said the cut would be about 10 million barrels a day, before later raising the figure.
“If it happens,” the Republican U.S. president wrote on Twitter, it “will be GREAT for the oil & gas industry!”
Trump did not specify that the cuts referred to barrels per day, but that is the most common expression of supply and demand for oil.
Oil markets plunged in March as the production feud between Saudi Arabia and Russia intensified as global demand plunged due to the coronavirus pandemic shuttering many economies.
Trump, who is scheduled to meet with U.S. oil executives on Friday, did not say there was a definitive deal between Saudi and Russia but said he expected and had “hope” for the cut.
The Organization of Petroleum Exporting Countries (OPEC) and allies including Russia had cut production for more than three years to bolster prices.
That deal ended in early March after Russia and Saudi Arabia were unable to come to an agreement to further curb output as the coronavirus outbreak worsened worldwide, and the Saudis said they would boost oil production to an all-time record. That, along with the pandemic, caused worldwide prices to drop to nearly $20 a barrel, losing more than two-thirds of its value so far this year.
A cut of 10 million to 15 million barrels per day would be nearly impossible by OPEC countries alone, but in the last several days, Texas regulators have weighed cutting output, and oil companies there have pressed the White House to act.
Two Republican U.S. senators have also proposed a bill to withdraw U.S. troops from Saudi Arabia in response to Riyadh’s move to flood the world with crude barrels.