Saudi Arabia and Russia agreed on Tuesday to extend their voluntary cuts to oil production until the end of this year, keeping 1.3 million barrels of crude off the world market and boosting energy prices.
The double announcement by Riyadh and Moscow pushed international benchmark Brent crude above $90 a barrel on Tuesday afternoon, a price not seen on the market since November.
The measures by both countries could increase inflation and the cost of gasoline. They also put new pressure on Saudi Arabia’s relationship with the United States, as President Joe Biden last year warned the kingdom that there would be unspecified “consequences” for partnering with Russia on cuts as Moscow wages war in Ukraine.
The Saudi Arabian announcement, released by the Saudi Press Agency, says the country would continue to monitor the market and could take further action if necessary.
“This additional voluntary cut comes to reinforce the precautionary measures taken by the OPEC+ countries with the aim of supporting the stability and balance of the oil markets,” an unidentified Saudi Energy Ministry official said, according to the report. the state news agency.
Meanwhile, Russia’s state news agency Tass reported what Alexander Novak, Russia’s deputy prime minister and former energy minister, said Moscow would maintain its 300,000 barrel-a-day cut.
The decision “is aimed at reinforcing the precautionary measures taken by the OPEC+ countries to maintain the stability and balance of the oil markets,” Novak said.
Brent crude traded above $90 a barrel on Tuesday after the announcement. Brent had been hovering between $75 and $85 a barrel since October last year. A barrel of West Texas Intermediate, a benchmark for the United States, was quoted at around 87 dollars a barrel.
Associated Press writer Aaamer Madhani in Washington contributed to this report.