WASHINGTON (Reuters) – U.S. President Donald Trump said on Friday that the United States would “help Mexico along” with oil production cuts that it is meant to make under a global deal to shore up slumping crude oil prices, but said the details had yet to be worked out.
The comments suggest that Trump could be considering an unprecedented effort to orchestrate a production cut in the United States, historically the world’s most vocal proponent of the free market.
“What I thought I would do, and I don’t know that it is going to be accepted, we’ll find out, the United States will help Mexico along and they’ll reimburse us sometime at a later date when they are prepared to do so,” Trump said during a White House briefing on the coronavirus.
Trump said he spoke to Mexican President Andres Manuel Lopez Obrador about the issue on Thursday.
“And we had a great conversation and we’ll find out how that all works out,” Trump said.
The group of oil producers known as OPEC+, including Saudi Arabia and Russia, had hammered out the framework of a record oil cut on Thursday to lift oil prices slammed by the coronavirus crisis. But efforts to conclude the deal had hit the barriers when Mexico refused to sign up to a 400,000-barrel-per-day cut in full.
President Lopez Obrador said earlier on Friday that Trump had agreed help out by cutting additional U.S. output after Mexico offered OPEC+ a cut of just 100,000 bpd, a quarter of what the group demanded. He said Trump “very generously said to me that they were going to help us with the additional 250,000 (bpd) to what they are going to contribute.”
Trump had been a vocal proponent of global supply cuts, seen as crucial to saving the U.S. drilling industry from collapse, but has resisted calls that the United States also orchestrate a reduction in supplies – saying U.S. drillers were already slowing their output for economic reasons.
U.S. laws forbid companies from colluding to reduce supply and raise prices, but does not prevent the government from ordering such supply reductions.
(This story was refiled to fix typo in paragraph 7)
(Reporting by Jeff Mason and John Whitesides; Writing by Richard Valdmanis; Editing by Sandra Maler)