Trump pledges to help Mexico meet output cuts sought by OPEC
President Donald Trump said the United States would cut its oil production to assist Mexico in keeping alive a deal between OPEC and other oil-producing countries to boost global oil prices.
An agreement reached on Thursday between Saudi Arabia and Russia to reduce oil production by millions of barrels per day appeared to stumble after Mexico declined to cut its own output by as much as 400,000 barrels per day. But Mexican President Andrés Manuel López Obrador said on Friday his country would reduce its production by 100,000 barrels per day, and that the United States would contribute another 250,000 barrels per day in cuts to help Mexico — a pledge that Trump seemed to confirm.
"President [López Obrador] and I spoke last night. They have a limit. OPEC nations agreed to a different limit. Cuts of 23 percent or so," Trump told a press conference. "So what I will do, and I don't know if it will be accepted, we’ll find out, but the United States will help Mexico along and they’ll reimburse us at some later date when they’re prepared to do so.”
Trump added picking up the difference between the OPEC request and Mexico's plan to cut 100,000 barrels per day was "a small amount for us and larger amount for Mexico, but it’s a very small amount for the United States.”
“I was going to pick up the slack, and they would make it up to us at a later date,” he continued, saying the reimbursement “could be in a different form.”
Spokespeople for the White House did not reply to questions. A State Department official declined to comment.
Trump's comment stirred confusion among executives in the U.S. oil industry since the U.S. government does not have the power to reduce oil output the way state-owned oil companies in Mexico, Saudi Arabia and Russia do.
One U.S. energy industry official was told by U.S. government officials that Trump's comments were referring to output cuts that U.S. oil companies were implementing because of the steep decline in oil prices.
U.S. oil prices have slumped by about two-thirds so far this year after Russia and Saudi Arabia flooded the market with crude in a fight for market share just as the global economy was cratering because of the coronavirus pandemic. That has prompted U.S. oil companies to curb spending by about $27 billion this year, which experts predict will reduce U.S. production by about 3 million barrels per day in the coming months.
