Big oil producers led by Saudi Arabia and Russia agreed on Sunday to cut output by 9.7 million barrels a day as energy markets grapple with the fallout from the coronavirus pandemic.
The biggest oil deal in history was clinched after three days of hard bargaining, two "virtual" meetings by video conference and a special meeting of G20 energy ministers, Arab News reported.
According to earlier reports, the 23 OPEC+ nations who held an extraordinary online meeting on April 12 agreed on oil production cuts in each of them. However, they failed to agree on the daily production cuts by at least ten million barrels and arrived at a consensus to reduced production by 9.7 million barrels a day as they failed to talk Mexico into accepting its quota of 400,000 barrels a day.
US President Donald Trump intervened to ease through the special Mexico terms, under which it will reduce output by much less than other OPEC+ members.
Trump thanked King Salman and President Vladimir Putin for a "great" deal.
"The big Oil Deal with OPEC Plus is done. This will save hundreds of thousands of energy jobs in the United States. I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office. Great deal for all!" the US President wrote on Twitter.
Saudi Arabia's energy minister Prince Abdulaziz bin Salman, who chaired the meeting, said that the cuts would amount to 12.5 million barrels per day, because of higher output in April from Saudi Arabia, the UAE, and Kuwait.
The production cuts will take about 10 per cent of global oil output off the market from May 1.
Global demand for crude oil is already down by at least 20 per cent due to the pandemic outbreak which has unleashed devastating effects on the global economy.
On Tuesday, Saudi Aramco will release its "official selling prices" for crude in May, a key indicator of how the Kingdom thinks the market will go.
Aramco agreed to cut output by 23 per cent under the OPEC+ deal, and delegates at the virtual conference said there could be further reductions -- about 3.5 million barrels -- from other big producers such as the US, Canada, and Norway, whose output is in decline because of the pandemic.
After the agreement was reached, Kremlin spokesman Dmitry Peskov said, "The whole world needs it. That's because the global economy will be on the brink of uncontrolled chaos in prices, on energy supplies, unless there is such a deal."
( With inputs from ANI )