Oil hits $90 for first time in 2023 as Saudi Arabia and Russia extend cuts

Oil hits $90 for first time in 2023 as Saudi Arabia and Russia extend cuts

Oil prices rose above $90 a barrel for the first time in 2023 on Tuesday as Saudi Arabia and Russia said they would extend their voluntary production and export cuts until the end of the year.

Saudi Arabia, which leads the expanded Opec+ cartel with Russia, has cut an additional 1mn barrels a day from the global market since July, in what had been originally billed as a temporary measure.

But having already extended the cut through September, on Tuesday Saudi Arabia’s state media reported the kingdom would keep its 1mn b/d reduction in place until the end of December, citing the Ministry of Energy.

Russia has added its own voluntary export cuts in recent months, with deputy prime minister Alexander Novak adding on Tuesday that its 300,000 b/d export reduction would stay in place until the end of the year.

The move, which threatens to reignite inflation concerns globally, is the latest effort by two of the world’s largest oil producers to boost prices despite much of the world grappling with higher energy costs.

Bob McNally, president of Rapidan Energy and a former energy adviser to the White House, said the cuts appeared designed to demonstrate Saudi Arabia and Russia’s “unity” on oil policy