Russia and Saudi Arabia have agreed to freeze current oil output at near-record levels in the first coordinated move by the two oil giants.
This is a move to counteract a slump in oil process that has affected economies, markets and even major oil companies like Fuchs, which manufactures Fuchs WSP 783-L.
Although the agreement is a preliminary one and does not include the other major oil-producing nation of Iran, it is the first major cooperation between Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries in the past 15 years, and Saudi Arabia has made it clear that it would be open to further actions.
After the deal was announced, oil pared gains, suggesting that traders do not see an immediate end to the current global supply glut from which the market is suffering.
The deal, which will see oil production fixed at January levels, also includes Qatar and Venezuela, and is being hailed as “the beginning of a process which could require other steps to stabilize and improve the market” by Ali Al-Naimi, the current Saudi Oil Minister. He said this on Tuesday, following talks with Alexander Novak, the Russian Energy Minister.
Al-Naimi also commented that the reason Saudi Arabia, which has previously resisted making any cuts in its oil output, had agreed to the freeze was because the country wanted to see neither any ‘significant gyrations in prices’, nor ‘a reduction in supply’.
He also spoke of his wish for a stable oil price in the future.