Saudi Arabia said on Tuesday that it would extend its cut in oil production cut of one million barrels a day for three months, through for the rest of 2023. In a coordinated statement, Russia, a co-leader with the Saudis of the producers’ group known as OPEC Plus, said it would continue export curbs that amount to 300,000 barrels a day.
The moves helped nudge oil prices, which have been on the rise in recent weeks, upward. Futures for Brent crude, the international benchmark, briefly reached $90 a barrel for the first time since June 2022. West Texas Intermediate crude, the U.S. benchmark, reached $87.50 before slumping a bit.
Together, the cuts amount to about 1.5 percent of global supplies.
The Saudi cuts, first announced early in the summer, are a move to support oil prices, and until now have been extended on a month-to-month basis. The move on Tuesday to extend it by three months surprised some analysts, and appeared to reflect a greater determination to keep a close rein on supplies — with the likely result of raising prices.
The Saudis, analysts say, favor a robust market for what remains their chief source of income, and appear willing to risk alienating customers as well as allies like the United States to achieve their aims.
The Saudis “see it as their job to keep the market tight,” said Richard Bronze, head of geopolitics at Energy Aspects, a research firm.
Prince Abdulaziz bin Salman, the Saudi oil minister, has been the public face of this more aggressive policy.
Until recently, the markets largely shrugged off the hawkish comments of the oil minister, who is the half brother of Crown Prince Mohammed bin Salman, the kingdom’s chief policymaker. In recent weeks, oil prices have risen as traders shifted to concerns about falling levels of production and continued strong demand.
Crude prices have risen more than 20 percent since mid-June.
While higher prices will be welcomed by oil exporters like Russia and shale drillers in the United States, among others, they risk complicating efforts by central banks to contain inflation.
Brent crude selling for $90 a barrel or above could also cause added friction between Riyadh and the Biden administration. The White House, though, is currently focused on efforts to broker diplomatic ties between the Saudis and Israel.