Oil prices spike as Saudi Arabia, Russia extend 1.3 million barrel a day oil cut through December

Saudi Arabia and Russia agreed Tuesday, Sept. 5, 2023, to extend their voluntary oil production cuts through the end of this year, trimming 1.3 million barrels of crude out of the global market and boosting energy prices. “Barring a sharp economic downturn, these supply cuts will drive deep deficits into global oil balances and should propel crude oil prices well above $90 per barrel,” McNally said. The Saudis are particularly keen to boost oil prices in order to fund Vision 2030, an ambitious plan to overhaul the kingdom’s economy, reduce its dependence on oil and to create jobs for a young population. But Saudi Arabia also has to manage its relationship with Washington. Saudi Arabia and Iran reached a détente in recent months, though the region remains tense amid the wider tensions between Iran and the U.S.Higher oil prices would also help Russian President Vladimir Putin fund his war on Ukraine.