Putin, Mohammed bin Salman talk over phone, are satisfied about oil supply cuts: Kremlin

The Kremlin said on Wednesday (September 6) that Russian President Vladmir Putin had a phone conversation with Saudi Crown Prince Mohammed bin Salman. It also said that leaders agreed recent agreement to cut energy supplies had stabilised the global energy markets.

Saudi Arabia and Russia are global leaders in oil production. The countries announced on Tuesday that voluntary oil supply cuts will be extended till the end of the year.

Russia will roll over its decision to reduce oil exports by 300,000 barrels per day (bpd), while Saudi Arabia will extend its voluntary oil output cut of 1 million bpd.

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Kremlin said Putin and Mohammed bin Salman both, were highly satisfied with cooperation between the countries within OPEC+ framework. OPEC+ is the group of leading oil producers.

"It was noted that the agreements reached on reducing oil production, combined with voluntary commitments to limit the supply of the commodity, make it possible to ensure the stability of the global energy market," the Kremlin said in a readout of the call.

In October last year, OPEC+ decided to reduce output by two million barrels per day. The decision had enraged the US who at the time had accused Saudi Arabia of siding with Russia amid the Ukraine war.

Oil prices spiked in July, the first month of Saudi-only cut taking effect. The prices cleared USD 80 per barrel threshold which analysts often describe as price Saudi Arabia needs to balance it budget.

Daily oil production in Saudi Arabia is approximately nine million barrels, well below its reported capacity of 12 million bpd.

Saudi oil firm Aramco announced profits of USD 30.08 billion in August for the second quarter of 2023. There was a fall of 38 per cent in the profits from the same period last year. The prices had surged last year after Russia invaded Ukraine.

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