OPEC members and Russia agreed on Sunday to oil production cuts to stem free-falling prices caused by a trade war between Russia and Saudi Arabia.
The agreement will cut worldwide output by 10 million barrels per day, amounting to one tenth of the global supply of oil.
U.S. senators have sharply criticized Saudi Arabia over its role in lowering oil prices. After March negotiations between Russia and Saudi Arabia over oil output broke down, Saudi Arabia decided to ramp up production and flood the market. Russia then proceeded to ramp up its own production, causing oil prices to drop to between $20-$30 a barrel just as stock markets across the globe were falling due to the effects of the coronavirus pandemic.
“They’ve spent over the last month waging war on American oil producers while we are defending theirs. This is not how friends treat friends,” Senator Kevin Cramer (R., N.D.), said on Sunday before the deal was reached. American troops are currently stationed in Saudi Arabia due to a heightened threat from Iran, which had attacked a Saudi oil facility in September.
“Frankly, I think [Saudi Arabia’s] actions have been inexcusable and they are not going to be easily or quickly forgotten,” Cramer continued. U.S. natural gas producers have been hit hard by the price war, decreasing production by 2-3 million barrels per day.