Oil storage tanks stand at the RN-Tuapsinsky refinery, operated by Rosneft Oil Co., in Tuapse, Russia, on Monday, March 23, 2020. Major oil currencies have fallen much more this month following the plunge in Brent crude prices to less than??$30 a barrel, with Russias ruble down by 15%. Photographer: Andrey Rudakov/Bloomberg via Getty Images

Abu Dabi (CNN Business)OPEC and Russia reached a tentative agreement Thursday evening for a global cut in oil production by 10 million barrels a day for May and June, the deepest cut ever agreed to by the world’s oil producers, a senior OPEC source told CNN.

The decline in production amounts to only about 10% of the world’s normal supply of oil, far below the estimates for how much demand for oil has collapsed in the wake of the coronavirus crisis. And it is unlikely to to stem the massive plunge in oil prices in recent months.

The deal was reached as oil ministers from OPEC and a number of non-OPEC oil producers held a video meeting on Thursday. It began with OPEC Secretary General Mohammad Sanusi Barkindo sounding the alarm about both oil prices and demand.

“For the oil market, [the coronavirus] has completely up-ended market supply and demand fundamentals since we last met on March 6,” he said. “Our industry is hemorrhaging; no one has been able to stem the bleeding.”

Barkindo said that projections call for demand of nearly 12 million fewer barrels per day in the current quarter. “These are staggering numbers! Unprecedented in modern times,” he said.

At that rate, “Given the current unprecedented supply and demand imbalance there could be a colossal excess volume of 14.7 million barrels a day in the the second quarter of 2020,” he said.

Even those dire forecasts may be too optimistic, as they could be underestimating how much demand has fallen as people are ordered to stay inside and with all but essential businesses shuttered in much of the world.

Tom Kloza, the chief oil analyst for the Oil Price Information Service, said he believes demand is down as much as 18 million to 20 million barrels a day. “This cut is woefully inadequate to stabilize prices into at least the summer,” he said Thursday evening.

The deal would see the output reduced to 8 million barrels a day from July to December followed by a 6 million barrels a day reduction from January 2021 to April 2022. ​

Non-OPEC member Mexico, however, is expressing reservations about the length of the agreement, according to the source.

Iran, Libya and Venezuela would be exempted from the output cuts due to sanctions or lost production.

Oil futures had started the day higher on reports that there would be an agreement to cut up to 15 million barrels a day. As the day wore on, though, doubts emerged that the cut would be that large and prices closed slightly lower.

Thursday’s emergency OPEC virtual meeting follows pressure by US President Donald Trump, who last week called on Saudi Arabia and Russia to deliver big productions cuts.

Trump said he spoke with Russian President Vladimir Putin and King Salman of Saudi Arabia for an hour and a half Thursday to discuss oil production.

Dozens of US oil companies are facing bankruptcy due to the collapse in oil prices and Trump said that he anticipates worldwide layoffs in the oil industry.

“The numbers are so low that there will be layoffs all over the world, there will be certainly layoffs in this country and we don’t want that to happen.,” Trump said.

Trump said he hopes there will be a deal worked out to cut oil production. “We’ll see what happens but as you know OPEC met today and I would say they are getting close to a deal,” said Trump.

Energy ministers from the G20, representing the world’s largest economies, are due to meet Friday at 8 am ET “to foster global dialogue and cooperation to ensure stable energy markets and enable a stronger global economy.”

— CNN’s Jason Hoffman contributed to this report

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