With oil prices having seen steep declines, the US President Donald J. Trump claims to have discussed with Saudi Arabia the possibility of reducing global oil production by 10 million barrels per day (bpd) or more.
The president tweeted about his conservation with Crown Prince Mohammed bin Salman of Saudi Arabia:
“Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & I expect & hope that they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!”
Dmitry Peskov, a spokesperson for the Kremlin, denied that any such conversation had taken place, however, and pointed the absence of any agreement with Saudi Arabia about production cuts. This was backed up by an unnamed OPEC+ delegate who, while speaking to Bloomberg, said that production cuts had not even been agreed in principle, let alone scale, between the two leading oil producers.
Any agreement will likely need broad support from all major oil producers. In the US, upstream operators like ExxonMobil, the oil major behind the Mobil lubricant brand, are generally free to produce oil without being limited by quotas. The US government could, however, take other actions to reduce its oil production. This could take the form of limiting exports while also allowing oil companies to store excess crude in the Strategic Petroleum Reserve, given that the usual oil storage is almost at full capacity.