Saudi Arabia and Russia, two of the top countries for producing crude oil, made a joint statement at the G-20 summit on Monday that the two will cooperate to contain excess volatility in the market.
It was announced by the Russian news agency, Interfax, that the two countries will work together to observe and analyse the market and produce plans on how Russia and Saudi can ensures continual investment in the industry, whilst strengthening crude oil prices. The first meeting to discuss the partnership will take place next month.
Alexander Novak, Russian Energy Minister suggested that freezing production could be one idea to aid in stabilizing oil prices. He also deemed the partnership as a “historic moment”, being as this is a cooperation between OPEC and non-OPEC members, Interfax said.
Saudi and Russia will also be cooperating on new plans to implement advances in technology involving the energy and gas industry.
Following the announcement, the price of Brent crude oil jumped by 4% initially, before paring gains and staying at $47.31 a barrel and 1% higher. At the beginning of 2016, oil prices fell to their lowest figures in roughly 13 years. Although vastly improving since their lowest figures that were of the twenties in early 2016, prices are still far behind their strong prices of $110 a barrel just two years ago.
Saudi Arabian minister Falih has said that putting a freeze on output would be preferred, just not right now.
"Freezing (production levels) is one of the preferred possibilities but it's not necessary today," he told the Saudi-owned Al Arabiya TV after the cooperation agreement was unveiled.
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