As a result of a constrained supply and increasing demand, Saudi Arabia and Russia announced that they would continue their voluntary oil restrictions through the end of the year.
Hours before a ministerial monitoring panel of the OPEC+ group of major oil producers meets online later on Wednesday, Saudi Arabia and Russia made their statements.
A full OPEC+ meeting can be summoned by the Joint Ministerial Monitoring Committee, but sources have told Reuters that it is unlikely to change the present oil output policy.
Following the news, oil prices continued to decline, sliding $1 to $89.92 per barrel for Brent futures, but by 0854 GMT, they had recovered to $90 per barrel.
OPEC+, which consists of OPEC member nations as well as important allies like Russia, has been reducing output since last year in what it describes as a preventative measure to preserve market stability.
Lower costs are necessary for global economic expansion, according to the U.S. and its Western allies.
The de facto leader of OPEC, Saudi Arabia, declared that it would maintain a voluntary cut in oil production of one million barrels per day (bpd) through the month of November and through the end of the year, and that it would reevaluate its decision the following month.
The oil ministry announced in a statement that the Kingdom’s production for November and December will be close to 9 million bpd.
“This voluntary cut decision will be reviewed next month to consider deepening the cut or increasing production,” the statement said.
The extra voluntary cut was originally adopted by Saudi Arabia in July, and it has been continued every month thereafter.
The cut, it was stated in September, would endure through the end of the year but would be reassessed every month.
In August, Russia announced that it would decrease exports by 300,000 bpd through the end of the year.
Along with other OPEC+ producers, the Saudis and the Russians agreed to additional voluntary cuts in April that stretch through the end of 2024.