Oil prices jump as Russia and Saudi Arabia extend cuts.
Oil prices jumped dramatically on Tuesday as Saudi Arabia announced it would extend its production cuts until the end of the year and Russia announced it would extend its export cuts of 300,000 bpd for the same period, OilPrice said.
ICE Brent prices jumped above $90 per barrel after Saudi Arabia and Russia extended their supply curbs until December 2023, with the former maintaining production cuts of 1 million b/d whilst the latter keeping oil exports lower by 300,000 b/d. With Chinese manufacturing data finally bouncing back to growth in August, the bearish sentiment is gaining the upper hand in oil markets right now.
Publishing its press release in unison with Russia’s export cut pledge, Saudi Arabia decided to extend its voluntary production cut of 1 million b/d for three months until December 2023, with any prospective supply changes to be reviewed on a monthly basis. Russia extended its decision to curb crude exports by 300,000 b/d until December 2023, acting in concert with Saudi Arabia, with the alleged aim of maintaining stability and balance in the oil markets.
In the meantime, Russian seaborne crude and product exports fell to their lowest since September 2022 as strong domestic demand in the summer kept volumes available for external markets capped. Delivering on their promise to cut exports by 500,000 b/d in July-August, Russian flows to India decreased by 30% to 1.5 million b/d, just as Urals has been trading above the oil price cap threshold of $60 per barrel since early July.