Saudi Arabia and Russia Agree to Extend Voluntary Oil Production Cuts Through 2021, Boosting Energy Prices

Saudi Arabia and Russia have agreed to extend their voluntary oil production cuts through the end of 2021, a move that could help stabilize the global oil market and boost energy prices.

The Saudi Press Agency reported Tuesday that Saudi Arabia will extend its voluntary production cut of 1 million barrels of oil a day through the end of the year, while Russia will extend its cut of 300,000 barrels a day. The combined cuts will total 1.3 million barrels of crude out of the global market.

According to an unnamed Energy Ministry official, the additional voluntary cut is intended to “support the stability and balance of oil markets.” The announcement pushed benchmark Brent crude above $90 a barrel in trading Tuesday afternoon, a price unseen in the market since last November.

The move comes as Saudi Arabia has been unilaterally cutting its output to try and boost sluggish crude oil prices. The agreement between Riyadh and Moscow comes despite President Joe Biden’s warning last year that there would be unspecified “consequences” for partnering with Russia on cuts as Moscow wages war on Ukraine.

The extension of the voluntary production cuts is expected to help stabilize the global oil market and boost energy prices. It remains to be seen how the agreement will impact the global economy and energy markets in the coming months.