Saudi Arabia and Russia together to agree on oil production cut

Saudi Arabia and Russia together to agree on oil production cut

Emilio Fabio Torsello
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The uncertainty on the outcome of the upcoming OPEC meeting in Vienna continues, while Riad tells the future US president that it would not be "healthy" to block the trade of crude oil

Oil prices are slightly higher after the latest statements made by Saudi Arabia and Russia about the possibility that on November 30 OPEC will reach an agreement on cuts to oil production. The rise in prices ­– several analysts explained – is also supported by a stronger dollar. And Russia - which is not an OPEC member country ­– with a statement by Energy Minister Alexander Novak, said she was also willing to limit oil output, although he stressed that there is uncertainty on the actual beginning of the agreement: November 2016 or January 2017. Novak also expected to meet with the Saudi oil minister, Khalid al-Falih, on the sidelines of the Gas Conference to be held this week in Doha.
And indeed, according to some analyses cited by Bloomberg, the world's largest energy exporter Russia’s support of OPEC, is to have added at least 6 billion dollars to Moscow's budget in terms of agreements and revenues, with oil revenues accounting for 40% of Russia's total state budget.
On the Saudi side, in turn, the Energy Minister responded in kind to the words of Donald Trump to cut the world's largest oil producer – Riad, from the US market. Khalid al-Falih indeed commented on the possibility saying that "stopping the trade of any commodity is never healthy." Saudi Arabia currently holds an 11% stake in the US oil market, and has also made several investments in some refineries in the US. More generally, 31% of US oil imports come from OPEC countries.