Oil prices have surged on Monday after Saudi Arabia and Russia agreed to extend crude oil output cuts until March 2018. This is part their latest effort to rebalance the global crude market, oil ministers for the two countries said on Monday.
Crude oil rose by over 2.7% as of 11.35 a.m. BST (6.35 a.m. ET), with prices reaching $49.13 per barrel, Brent oil also rose by 2.4% hitting the $52.15 per barrel mark.
The next round of cuts will be on the same terms as the existing deal, Saudi energy minister Khalid al-Falih said at a joint briefing in Beijing.
Under the current agreement, the Organisation of the Petroleum Exporting Countries (OPEC), of which Saudi Arabia is the de-facto leader, and other producers including Russia pledged to cut output by almost 1.8 million barrels per day (bpd) during the first half of the year. Russian oil minister Alexandra Novak said at the briefing the aim of the cuts is to rebalance the global crude market.
