OPEC and Russia have agreed to collectively throttle back oil production by 1.2 million barrels per day to dry up a global supply glut, according to energy reporters from the Wall Street Journal.
OPEC nations would cut 800,000 barrels and the Russia-led group would handle the remainder, according to the WSJ.
Oil prices on indices soared on the news. Brent crude jumped 5.2% to $63.11 a barrel on London’s Intercontinental Exchange.
Yesterday, it looked like OPEC and Russia would not find common ground on a production cut amount, with Saudi Energy Minister Khalid Al-Falih saying an agreement was far from certain.
The agreement caps a busy week for OPEC and Russia and a dismal month for oil bulls. Oil prices have plunged 30 percent since October as supply has surged and global demand growth has weakened.
As ABC News reports, the news is unlikely to be warmly received by President Trump, who on Wednesday tweeted,”Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!”
But according to Michael Amon, Deputy Bureau Chief for the Middle East and North Africa for the Wall Street Journal, Saudi Arabia appears to have prioritized a stable and higher price of oil over appeasing President Trump.
“[T]he Saudis ramped up production to help Trump put tougher sanctions on Iran without sending oil prices to $100 a barrel. And they miscalculated how that would work out, hence the price crash of recent weeks,” Amon wrote on Twitter.
“But that production increase was more of an anti-Iranian measure than a pro-Trump measure. Today’s production cut shows the Saudis are going to look out for their bottom line over the president’s interests.”