Saudi Arabia's Oil Minister Khalid al-Falih listens during a news conference after an OPEC meeting in Vienna, Austria, November 30, 2017. Heinz-Peter Bader | Reuters

President Donald Trump has told foreign leaders that "America First" means he will always put the needs of America ahead of the needs of other nations — and that they should do the same for their own country. Saudi Arabia's leadership appears to be on board with that message. Last week, Saudi Arabia disregarded Trump's public pressure campaign to keep pumping at full throttle and cut fuel costs. The kingdom instead persuaded two dozen oil producers to cut output and announced a steep drop in Saudi production over the next two months. "Saudi Arabia today had a 'Saudi first' policy," Helima Croft, global head of commodity strategy at RBC Capital Markets, said on Friday. Hours earlier, OPEC, Russia and several other producers agreed to take 1.2 million barrels per day off the market beginning in January.

The decision marks a reversal in Saudi energy policy. Over the last six months, the Saudis ramped up production by more than 1 million bpd — a move cheered by Trump. Now, the kingdom will endeavor to cut about 900,000 bpd in just two months. On the surface, the decision looks like a stinging and risky insult to a critical ally. It comes as U.S. lawmakers are threatening to punish the kingdom after Saudi agents killed U.S. resident and Washington Post columnist Jamal Khashoggi in Istanbul in October. But with oil prices mired in a bear market, few commodity analysts doubted Saudi Arabia would cut production. The kingdom needs Brent crude to rise about $25 a barrel just to balance its budget, according to the International Monetary Fund. It was also clear that Saudi Arabia, which produces twice as much oil as the next-biggest OPEC producer, would have to contribute the largest cuts. The Saudis produced below their quota when OPEC reached a deal with Russia and other producers to cut output beginning in 2017, and the kingdom's production hikes have dwarfed increases from other producers since the alliance agreed to raise output in June. Meanwhile, many other OPEC members are producing at or below the levels they agreed to in 2016.

"The Saudis will always do the lion's share. But for them, it's important optically and to some degree in a real world sense that Russia and several other OPEC countries go along," said Bob McNally, founder and president of Rapidan Energy Group. What remained uncertain heading into last week's meeting was how transparent the Saudis would be. OPEC had reportedly considered a convoluted plan that would have removed barrels from the market but masked the size of the cuts to avoid angering Trump. But on Friday, Saudi Energy Minister Khalid al-Falih sent a message that was clearer than some analysts expected. In November, Saudi Arabia pumped a record 11.1 million bpd, Falih disclosed. This month, Falih anticipates output will fall to about 10.7 million bpd. In January, the Saudis plan to produce 10.2 million bpd. "This is partly driven by our commitment to start on the right foot in 2019 and to demonstrate that delivering on this agreement is not going to take a long, protracted period of gradually winding down," Falih said. "We say what we mean, and we deliver on what we say." Officially, OPEC members will cut production from October levels, when the Saudis pumped about 10.6 million barrels a day. But the surge in Saudi production in November will make the drop look more eye-popping.