The OPEC cartel and other oil producers have agreed to cut oil production by nearly 10 million barrels a day, or a tenth of global supply, to boost oil prices, during the coronavirus pandemic.
Prices have collapsed as the Covid-19 crisis has largely halted global travel and slowed down other energy-chugging sectors such as manufacturing.
The outbreak has devastated the oil industry in the US, which now pumps more crude than any other country.
“This could be the largest reduction in production from OPEC for perhaps a decade, maybe longer,” said U.S. Energy Secretary Dan Brouillette.
The cartel and other nations agreed to cut 9.7 million barrels a day throughout May and June.
The so-called Opec+ countries agreed to allow Mexico to reduce its output by 100,000 barrels a month - a sticking point for an accord initially reached Friday after a marathon video conference between 23 nations.
Mexico had initially blocked the deal but its president, Andres Manuel Lopez Obrador, had said on Friday that he had agreed with US president Donald Trump that the US will compensate what Mexico cannot add to the proposed cuts.
“The United States will help Mexico along and they’ll reimburse us sometime at a later date when they’re prepared to do so,” Mr Trump said at a White House press briefing on Friday.
Video aired by the Saudi-owned satellite channel Al-Arabiya showed the moment that Saudi Energy Minister Prince Abdulaziz bin Salman, a son of King Salman, assented to the deal.
“I go with the consent, so I agree,” the prince said, chuckling, drawing a round of applause from those on the video call.
The American Petroleum Institute lauded Sunday’s global pact, saying it will help get other nations’ state-owned oil production to follow the lead of U.S. producers that are trying to adjust to plunging demand.
Brouillette said the U.S. did not make commitments of its own production cuts, but was able to show the obvious — that plunging demand because of the pandemic is expected to slash U.S. oil production.
Iranian Oil Minister Bijan Zanganeh also told state television that Kuwait, Saudi Arabia and the United Arab Emirates would cut another 2 million barrels of oil a day between them atop the OPEC+ deal.
The three countries did not immediately acknowledge the cut themselves, though Zanganeh attended the video conference.