With Saudi Arabia and Russia agreeing on the contours of an unprecedented plan to slash crude output, President Donald Trump is on the verge of getting the global oil deal he wanted – without taking steps to ratchet down US production.
The tentative agreement – which would be the largest-ever oil output cut agreed on by OPEC+ ministers – is coming without the US mandating curbs on its own crude production. And if Trump agreed to anything in phone calls with the Saudis and Russians in recent days, those deals haven’t been made public yet.
In other words, Trump may win a global oil agreement by letting the market work.
“The US is already effectively cutting because we cut in response to market force,” said James Lucier, managing director of research firm Capital Alpha Partners LLC. “We’re not a state oil corporation; we’re not government-directed producers of oil. US oil production has an automatic response to excess supply, which is to shut in” that production.