Oil price rises after Russia & Saudi Arabia sign pact

Oil price rises after Russia & Saudi Arabia sign pact

The price of oil has jumped by around 3% after Russia and Saudi Arabia reached a deal to set up a task force to review oil market fundamentals and look for ways to sustain the oil market.

The announcement was made by the countries’ energy ministers, Alexander Novak and Khalid al-Falih..

The price of Brent crude jumped by US$1.28 to $48.11 a barrel.

The price of oil dropped to its lowest level in almost 13 years at the start of 2016, due to a production glut and is still below the $100 a barrel price.

Minister Novak said the agreement was a “historical moment” between members of OPEC and non-member Russia.

He added that the two countries were moving to a strategic energy partnership which would allow them to address global challenges.

The agreement has been welcomed by other oil ministers including Kuwait’s acting oil minister Anas al-Saleh.

“This dialogue confirms that the main oil producers are watching the oil market to help achieve stability,” he said.

Russia and Saudi Arabia, the world’s two largest oil producers will meet again later this month, again in October and in November.