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Saudi Arabia and Russia prolonged their unilateral oil supply curbs by another three months, a more aggressive move than traders had been expecting as the OPEC+ members seek to support a fragile global market.
The leader of the Organization of Petroleum Exporting Countries will continue its production cutback of 1 million barrels a day until December, according to a statement published by the state Saudi Press Agency on Tuesday. The move will hold output at about 9 million barrels a day — the lowest level in several years — for six months in total.
Russia’s export reduction of 300,000 barrels a day will be extended for the same duration, Deputy Prime Minister Alexander Novak said in a separate statement.
“This voluntary cut decision will be reviewed monthly to consider deepening the cut or increasing production,” according to the statement published by SPA. Saudi Arabia is aiming to support “the stability and balance of oil markets.”
The move by Riyadh and Moscow exceeded market expectations for an extension of just one additional month, sending Brent crude, the international benchmark, up by 1.54% to $90.37 a barrel as of 2:38 p.m. in London.