An oil field in Azerbaijan. A non-OPEC petroleum exporter, Baku favored the production cuts. (Wikimedia Commons)

OPEC+ Agrees to Prop Up Prices with Major Production Cuts

Members of OPEC (Organization of Petroleum Exporting Countries) and non-OPEC oil-producing nations alike have agreed to production cuts equaling about a fifth of global supply. The move is designed to help reverse 18-year lows in oil prices resulting from both the coronavirus slowdown and a recent war of wills between Russia and Saudi Arabia, the former having originally refused to cut production and the latter threatening to ramp it up in retaliation. The cuts, which should be felt in full by May 1, came after four days of feverish video conferencing spurred on by US President Donald Trump, who is mindful of the toll that low prices have taken on America’s shale-oil industry due to the relatively high costs of fracking, and the prices’ impact on the global economy, which is already reeling from other effects of the pandemic. With word of the deal, oil prices jumped by only about $1 a barrel, with some doubting that it would be sufficient in the short term to compensate for a glut in existing supplies.

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