Oil prices jumped about 2% on Tuesday after Saudi Arabia and Russia announced a fresh extension to their voluntary supply cuts, stretching a combined 1.3 million barrel per day (bpd) reduction for another three months through December.
According to Reuters, by 1323 GMT Brent crude futures for November were up $1.62, or about 1.8%, to $90.62 a barrel, while U.S. West Texas Intermediate crude (WTI) October futures rose $1.92, or about 2.2%, to $87.47 a barrel.
The Saudi’s decision to extend its 1 million bpd voluntary cut will be reviewed monthly to consider whether to deepen the cut or increase production, state news agency SPA said on Tuesday.
Saudi Arabia was widely expected to extend its voluntary cuts into October.
Fellow OPEC+ member Russia also prolonged its voluntary cuts through the end of the year “to maintain stability and balance” on oil markets, Deputy Prime Minister Alexander Novak said on Tuesday.
The world’s second-largest oil exporter is reducing exports by 300,000 bpd for the period. It has been cutting output and exports in tandem with Saudi Arabia on top of existing OPEC+ supply reductions.
Russia had said it would cut oil exports voluntarily by 500,000 bpd, about 5% of its output, in August and by 300,000 bpd in September. Russia is also reducing its oil production by 500,000 bpd until the end of 2024.