After four days of intense telephone and video meetings, including blunt negotiations with the presidents of Mexico and Russia and Saudi Arabia's powerful Crown Prince, United States President Donald Trump has cajoled the so-called Opec+ oil cartel to collectively cut production in May and June by close to 10 million barrels per day. The 23 nations involved also agreed to a series of cuts for the next 12 months to manage the cycle in the aftermath of the coronavirus pandemic, and to moderate the inventory overhang. The cuts amount to almost an eighth of global oil production and mark the first time that the US has so actively involved itself in an oil issue. Until now, Mr Trump had been a strident critic of Opec.

Given that the scale of the demand collapse is more than twice that of the cuts agreed, this accord begs the question: So what? Well, without it, prices may have collapsed further when markets opened after the weekend. If the deal holds, Saudi Arabia and Russia, whose tussle accentuated last month's oil price collapse, will bear the brunt of the cuts. The rest will be absorbed by the US, Brazil and Canada and some other oil-consuming nations in the Group of 20 leading economies who are not Opec members. Some of them, like China and India, will buy more oil to bolster strategic reserves. Interestingly, Mr Trump has not hesitated to crack the whip on the Saudis, whom he's coddled so consistently on a host of other issues.