On March 8, 2020, Saudi Arabia launched a price war with Russia, which facilitated a quarterly drop of 65% in the price of oil.  In the first weeks of March, U.S. oil prices fell by 34%, crude oil by 26% and Brent oil by 24%.   The price war was triggered by a breakdown in the dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over planned oil production cuts in the midst of the COVID 19 pandemic.  Russia left the agreement, which led to the downfall of the OPEC alliance. Oil prices had already fallen by 30% since the beginning of the year due to a drop in demand.  The fight for awards is one of the main causes and impact of the global stock market crash that followed.  Trump supported President Andrés Manuel Lopez Obrador by vaguely promising that he would make up for the difference and helping the Saudis and Russians not to abandon the interim agreement. OPEC has pledged to reduce a record 10 million barrels per day ,»according to Mexico`s agreement.» Now that Trump is personally involved, the stakes are too high for the deal to fail. But even Trump acknowledged Friday that he wasn`t sure a deal could be reached.
«We`re trying to get Mexico on the barrel, as the phrase says,» Trump told reporters at the White House. OPEC members and their allies began talking last week in the hope that the United States, Canada and other Western producers would accept explicit cuts of up to four million or five million barrels per day. Instead, U.S. officials simply assured that crude oil production would be reduced over time, in addition to the voluntary reductions that have already begun at some U.S. companies. The agreement announced sunday will amount to 7.7 million barrels per day from July to December and 5.8 million barrels per day from January 2021 to April 2022. It was not immediately clear whether the Trump administration has made a formal commitment to cut U.S. production, but in the face of falling prices, many companies in the country have already cut production. There is no international mechanism to strictly enforce these production agreements and fraud is common.