Brent crude has surged to $90, driven by Saudi Arabia’s decision to extend its unilateral oil production cut for another three months, aiming to stabilize the fragile global market. In a move that exceeded market expectations, Russia also extended its export curbs. Additionally, following a recent increase in excise duty on petrol and diesel in the country, prices at the pumps are rising sharply. Saudi Arabia plans to continue cutting back 1 million barrels a day until December, which will maintain output at around 9 million barrels a day, the lowest level in years. Russia’s export reduction of 300,000 barrels a day will also be extended. Despite concerns over economic growth in China, global crude markets are tightening as demand reaches record levels. Brent crude, the international benchmark, has jumped 1.4% to $90.25 a barrel in London. Major consuming nations have criticized Saudi Arabia and its partners for intervening in the market, fearing a renewed spike in inflation that could harm the recovery. Nonetheless, Saudi Arabia is committed to its price-over-volume strategy, as it needs an oil price of almost $100 a barrel to support the ambitious spending projects of Crown Prince Mohammed bin Salman.
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