OPEC+ is looking to cut 20 million barrels per day, not 10MMbpd, according to Trump.

OPEC+ is looking to cut 20 million barrels per day (MMbpd), not 10MMbpd.

That’s what U.S. President Donald Trump outlined in a tweet on Monday, adding that he had been “involved” in the OPEC+ negotiations “to put it mildly”.

“If anything near this happens, and the world gets back to business from the Covid-19 disaster, the energy industry will be strong again, far faster than currently anticipated,” Trump said in the tweet.

“Thank you to all of those who worked with me on getting this very big business back on track, in particular Russia and Saudi Arabia,” he added.

....disaster, the Energy Industry will be strong again, far faster than currently anticipated. Thank you to all of those who worked with me on getting this very big business back on track, in particular Russia and Saudi Arabia. — Donald J. Trump (@realDonaldTrump) April 13, 2020

The OPEC+ group announced Sunday a deal to cut oil production by 9.7 MMbpd from May 1 to June 30, then by 7.7MMbpd from July 1 to December 31 and by 5.8MMbpd from January 1, 2021, to April 30, 2022.

Commenting on Trump’s tweet, Paul Horsnell, the head of commodities research at Standard Chartered Bank, told Rigzone that OPEC+ “was indeed looking for 10[MMbpd] from its group”.

“There’s really no context as to what he means, but I suspect he is just taking someone’s estimate of what will have to be cut due to low prices or full storage and calling that a cut,” Horsnell stated.

“In terms of real cuts, it would be a good result if this agreement results in 7MMbpd actually coming off the market voluntarily,” he added.

Bjornar Tonhaugen, Rystad Energy’s head of oil markets, outlined that a cut closer to 20MMbpd can only be achieved by “creative accounting” and “only exist on paper”.

“Even when including Libya, Iran, Venezuela (exempt from cuts), declines in the U.S., Canada, Brazil and possibly other countries, the reduction will not reach anywhere near 20MMbpd from May 1,” he stated.

Tonhaugen added that Rystad would be surprised to see overall OPEC+ compliance at 50 percent through May. He went on to say, however, that Rystad believes the deal is potentially bullish for oil prices down the line, “as the deal has a surprisingly long duration”.

To contact the author, email andreas.exarheas@rigzone.com