Saudi Arabia says new oil cuts show teamwork with Russia is strong

Russia-Saudi oil cooperation is still going strong as part of the Opec+ alliance, which will do “whatever necessary” to support the market, Saudi Energy Minister Prince Abdulaziz bin Salman told a conference on Wednesday.

Opec+, a group comprising the Organization of the Petroleum Exporting Countries and allies including Russia which pumps around 40 per cent of the world’s crude, has been cutting oil output since November in the face of flagging prices.

Saudi Arabia and Russia, the world’s biggest oil exporters, deepened oil supply cuts on Monday in an effort to send prices higher.

Yet the move only briefly lifted the market. On Wednesday, benchmark Brent futures were down more than 1 per cent at $75.30 per barrel, lower than the $80-$100 per barrel than most Opec nations need to balance their budgets.

Opec says it does not have a price target and is seeking to have a balanced oil market to meet the interests of both consumers and producers.

The United States, the biggest oil producer outside Opec+, has repeatedly called on the group to boost production to help the global economy and has criticised Saudi cooperation with Russia after Moscow’s invasion of Ukraine.

But Riyadh has repeatedly rebuffed US calls and Prince Abdulaziz said on Wednesday that new joint oil output cuts agreed by Russia and Saudi Arabia this week have again proven sceptics wrong.

“Part of what we have done (on Monday) with the help of our colleagues from Russia was also to mitigate the cynical side of the spectators on what is going on between Saudi and Russia on that specific matter,” Prince Abdulaziz said.

“It is quite telling seeing us on Monday coming out with not only our (oil cut) extension... but also with validation from the Russian side,” he told a meeting of oil industry CEOs with ministers from Opec and allies, known as the Opec International Seminar.

“Imagine if we had 60 per cent of the producers or 80 per cent of the producers... We will definitely do a better job.”