Saudi Arabia and Russia are committed to maintaining oil market stability as world oil demand remains squeezed from the economic fallout of the coronavirus pandemic.
“We are pleased with the recent signs of improvements in economic and market indicators, especially the growth in oil demand and the ease in concerns about storage limits as various countries around the globe begin to emerge from their stringent lockdowns,” the energy ministers of the two countries said in a joint statement.
Saudi Arabia and Russia head the Opec+ alliance of producers, which have since 2016 undertaken market corrections to stabilise inventory levels. The group alongside producers from the G20 are cutting 9.7 million barrels per day from May, with limited restrictions to remain in place until 2022.
Brent, the international crude benchmark, was lower by 0.23 per cent trading at $29.91 per barrel, while West Texas Intermediate, the gauge for US oil, was down 0.78 per cent at $25.58 per barrel at 6.05pm UAE time.
The latest statement came following a pledge by Saudi Arabia this week to cut 1m bpd in addition to its existing commitments. Its allies Kuwait and the UAE also volunteered cuts of 80,000bpd and 100,000bpd respectively.
Meanwhile, Iraq, Opec's second-largest producer, and a laggard in terms of complying with production cuts said it reached an agreement with international oil companies to cut 300,000bpd from across its five major oil fields. The producer's total production cuts will be just below 700,000bpd, the Iraqi energy ministry told Reuters on Wednesday.
Opec expects global upstream exploration capital expenditure to fall 23 per cent in 2020, nearly half the levels seen during the price crash that began in 2014, the group said in its latest monthly market report.