Russia and Saudis to co-ordinate oil policy
Saudi Arabia and Russia agreed yesterday to co-operate in oil markets, saying they will not act immediately but could limit output in future, sending oil prices higher on hopes the two top producers would work together to tackle a global glut.
The joint statement was signed by the country's energy ministers in China on the sidelines of a G20 gathering and followed a meeting between Russian President Vladimir Putin and Saudi Deputy Crown Prince Mohammed bin Salman.
Russian Energy Minister Alexander Novak said the two countries were moving to a strategic energy partnership and that a high level of trust would allow them to address global challenges.
His Saudi counterpart, Khalid al-Falih, said the agreement would encourage other producers to co-operate.
Oil prices LCOc1 soared almost 5pc ahead of a news conference by the ministers but pared gains to trade up 2pc by 11.30 as the agreement yielded no immediate action.
"There is no need now to freeze production ... We have time to take this kind of decision," Falih said.
"Freezing production is one of the preferred possibilities but it does not have to happen specifically today." Even if yesterday's statement was short on actions, it marks a significant development in the Russia-Saudi relationship.
The two countries have been effectively fighting a proxy war in Syria and Moscow also sees itself as a big ally of Iran - Riyadh's arch-rival in the Middle East. Oil producers will hold informal talks later this month. (Reuters)