DUBAI, United Arab Emirates (AP) — Saudi Arabia and Russia agreed Tuesday to extend their voluntary oil production cuts through the end of this year, trimming 1.3 million barrels of crude out of the global market and boosting energy prices.
The dual announcements from Riyadh and Moscow pushed benchmark Brent crude above $90 a barrel in trading Tuesday afternoon, a price unseen in the market since November.
The countries’ moves likely will increase the cost for motorists at gasoline pumps and put new pressure on Saudi Arabia’s relationship with the United States. President Joe Biden last year warned the kingdom there would be unspecified “consequences” for partnering with Russia on cuts as Moscow wages war on Ukraine.
Saudi Arabia’s announcement, carried by the state-run Saudi Press Agency, said the country still would monitor the market and could take further action if necessary.
State-run Russian news agency Tass quoted Alexander Novak, Russia’s deputy prime minister and former energy minister, as saying Moscow would continue its 300,000 barrel a day cut.
Benchmark Brent crude traded Tuesday at $90 a barrel immediately after the announcement. Brent had largely hovered between $75 and $85 a barrel since last October.
There was no immediate reaction in Washington, though U.S. lawmakers have criticized OPEC, Saudi Arabia and Russia over their past production decisions.
The average gallon of regular unleaded gasoline in the U.S. stands at $3.81, according to AAA. That’s up just a few cents from this time last year, coming after the Labor Day weekend’s typically higher prices.
The Saudis are particularly keen to boost oil prices in order to fund Vision 2030, an ambitious plan to overhaul the kingdom’s economy, reduce its dependence on oil and to create jobs for a young population.
