U.S. President Donald Trump said on April 2 that he expects Saudi Arabia and Russia to lower oil production, revealing that he had discussed the issue with Crown Prince Mohamad Bin Salman Al Saud.
“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!” Turmp wrote on Twitter.
Following Trump’s announcement, Saudi Arabia called for a meeting of OPEC+ to reach “a fair oil agreement that would bring stability to the global oil market.”
From its side, the Kremlin denied that Saudi Crown Prince Mohamad Bin Salman had spoken with President Vladimir Putin.
Trump’s announcement led to a 21% increase in oil prices, which have been plummeting for the last few weeks. Brent Crude reached $30.33 for a barrel.
Last month, Saudi Arabia began flooding the oil market in an attempt to capture a larger share, which led to the biggest oil price fall since the war in the Persian Gulf in 1991. Riyadh offered unprecedented discounts to its customers in Asia, the U.S. and Europe.
Russia was badly hit by the Saudi move as its oil exports to Europe were affected. The Russian Ruble collapsed 10%, falling to its lowest level in more than four years. Iran, which is already suffering from crippling sanctions by the U.S, was also harmed.
Saudi Arabia’s harsh offensive was apparently about to hit the U.S. own oil trade. This has apparently forced Trump to intervene, pressuring Bin Salman into cutting back on oil production.