Russia and Saudi Arabia Urge All OPEC Plus Countries to Join Oil Production Cut Agreement

Saudi Arabia and Russia, as two of the world's largest oil exporters, called on all members of OPEC Plus on Thursday to join the production cut agreement 'for the benefit of the global economy.' This request came just days after an OPEC Plus meeting. According to Reuters, hours after Russian President Vladimir Putin visited Saudi Crown Prince Mohammed bin Salman in Riyadh, the Kremlin released a joint statement regarding the outcome of their discussions. The Kremlin statement noted, 'In the energy sector, the two sides appreciated the close cooperation between them and the successful efforts of OPEC Plus countries in strengthening stability in global oil markets.' They emphasized the importance of continuing cooperation and the necessity for all participating countries to join the OPEC Plus agreement in a way that secures the interests of producers and consumers and supports global economic growth. Simultaneously, the Saudi state news agency 'SPA' reported that Mohammed bin Salman and Putin stressed the need for OPEC Plus members to adhere to the group's agreement during their meeting. Oil market sources indicated that with such explicit remarks from the Kremlin and the Kingdom of Saudi Arabia regarding 'joining' the production cuts, this action appears to be an effort to send a message to other OPEC Plus members who have not sufficiently reduced production. Members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers like Russia, referred to as 'OPEC Plus,' agreed last week on voluntary production cuts of about two million barrels per day. The largest OPEC member excluded from the production cuts is Iran, whose economy has been under various U.S. sanctions since 1979 following the occupation of the U.S. embassy in Tehran. Saudi Arabia and Russia, the leaders of OPEC Plus, also agreed to voluntarily reduce their oil production by one million barrels per day until March 2024. This decision was made in addition to a previous one million barrel reduction and aims to strengthen oil prices during the winter season. The Washington Post reported that voluntary production cuts, without a formal agreement among members, raise doubts about price sustainability. However, the goal of this action is to address economic challenges and stabilize prices. Putin's visit was accompanied by military aircraft escorts to the UAE and Saudi Arabia and a warm welcome for the Russian President. The Kremlin stated that Putin discussed 'sensitive issues' in the UAE and Saudi Arabia. OPEC Plus reduced its production to prevent a decline in oil prices. OPEC has rejected the Islamic Republic; there are neither sanctions nor expulsion of Israeli ambassadors. The Wall Street Journal reported that Saudi Arabia plans to increase oil production next year 'to attract the attention of the U.S. Congress.' Oil is on the verge of reaching $100; OPEC Plus maintains its current oil production strategy.