(HorizonPost.com) – The Kremlin reported on Wednesday that a telephonic conversation occurred between Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman. Their recent discussions on reducing oil supply have played a pivotal role in stabilizing global energy markets.
The previous day, the world’s foremost oil producers, Russia and Saudi Arabia, revealed their decision to continue their voluntary oil supply reductions until the year’s end. This decision was a surprise, especially with the current surge in the oil market and predictions of a constrained supply for the upcoming fourth quarter.
Russia has confirmed its commitment to slash oil exports by 300,000 barrels daily. Concurrently, Saudi Arabia has decided to prolong its self-imposed oil production cut of 1 million barrels daily.
The leaders expressed profound satisfaction regarding the collaboration of their nations within the OPEC+ group, which comprises the top oil-producing countries. The Kremlin’s summary of the call emphasized, “The consensus on curbing oil production, coupled with the self-imposed supply limitations, is instrumental in ensuring global energy market equilibrium.”
The decisions regarding the cuts will be assessed monthly by both nations, considering either intensifying the cuts or increasing production based on market dynamics, according to SPA and Novak.
Russia’s collaboration with Saudi Arabia in prolonging the voluntary reductions enables the Kremlin to increase its revenue, even as it faces conflict in Ukraine and despite the European Union’s efforts to restrict Moscow’s earnings through a price cap on Russian oil. Notably, a significant portion of Russian oil is traded at prices exceeding this cap.
Both countries will evaluate the cut decisions monthly, weighing whether to deepen the cuts or boost production in response to market trends, as stated by SPA and Novak.
By partnering with Saudi Arabia to extend the voluntary cuts, Russia is in a position to bolster its revenue, even amidst its ongoing conflict in Ukraine. This is despite attempts by the European Union to curtail Moscow’s income with a ceiling on Russian oil prices. It’s worth noting that a large chunk of Russian oil currently trades above this set limit.
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