The report sent global crude prices surging.
November futures for Brent crude rose by almost five percent to over $49 per barrel in early trading on Monday. US benchmark West Texas Intermediate surged almost four percent higher to over $46 a barrel.
During the G20 summit, Russia and Saudi Arabia agreed to work together to ensure oil market stability.
Oil market stability is impossible without Saudi-Russian cooperation, Deputy Crown Prince Mohammed bin Salman said after the meeting on Sunday with Russian President Vladimir Putin in Hangzhou, China.
“Our countries are the two biggest oil producers, that’s why there can’t be a stable oil policy without the participation of Russia and Saudi Arabia,” said the Prince. The Russian President said it is important for the two countries to “maintain a permanent dialogue.”
One of the sources said Russia would likely participate in OPEC’s November meeting in Vienna to discuss the possibility of an oil output freeze by major producers. OPEC will also hold informal talks in Algeria later this month.
Last week at the Eastern Economic Forum in Vladivostok, President Putin said Russia hadn’t given up on the idea of a global oil production cap despite the failure of freeze talks in April.
“From the viewpoint of economic sense and logic, then it would be correct to find some sort of compromise. I am confident that everyone understands that. We believe that this is the right decision for world energy,” said Putin.
Talks on a production freeze between Russia and OPEC collapsed in April, after Saudi Arabia demanded economic and political rival Iran be part of the deal. Tehran categorically refused to cut production as it was aiming to return to its pre-sanction output level of four million barrels per day.
Russia is the world’s largest oil producer followed by Saudi Arabia.