Mexico Says Reached Deal With Trump to Cut Crude Output
EghtesadOnline: The president of Mexico -- the lone holdout in an OPEC deal to cut crude production and shore up prices -- said Friday that he has reached a deal with the US president to reduce oil output.
Mexico will cut production by 100,000 barrels per day, President Andres Manuel Lopez Obrador said, adding that it was Donald Trump who reached out to him, France 24 reported.
"Trump communicated with us," he told a news conference, according to Financial Tribune.
The announcement came hours after OPEC revealed that major oil producers around the world -- except Mexico -- had agreed to cut output by 10%.
Oil prices have been wallowing near two-decade lows due to the coronavirus pandemic and a price war between key players Saudi Arabia and Russia.
The agreement would see output between May and June cut by 10 million bpd and another eight million from July to December, but it depends on Mexico's consent to take effect.
Under the Organization of the Petroleum Exporting Countries deal, Mexico would have had to cut its output by 400,000 bpd.
But Mexico resisted, and wanted the reduction limited to 100,000. Lopez Obrador said on Friday that Trump agreed to cut US production by an extra 250,000 bpd "as compensation" for Mexico.
"They asked us for a reduction like that of Saudi Arabia, like that of Russia, of around 23% of production," said Lopez Obrador. "We resisted to the end because it cost us a lot of effort to raise production."
Under a war-time emergency law, Trump could in fact order US oil companies to modify production levels but normally this would be for them to churn out more crude, not less.