Russia and Saudi Arabia agree on reducing crude oil production: Putin

Moscow: Analysts have indicated a change in equations, in the fuel market, because of the trade war, the supply exceeding the demand situation and tension over the Iran issue. Against this background, Russia and Saudi Arabia have once again concurred on the issue of reducing crude oil production. Both the countries have been willing to keep the crude oil production low for the next six to nine months, and it will be endorsed in the OPEC meeting, scheduled for the next week, confirmed Russian President.

Iran has threatening to withdraw from the nuclear deal. At the same time, the United States has dramatically increased crude oil export and many countries buying crude oil from Iran, have started buying crude oil from the United States. Currently, the shale production in the United States has increased tremendously and is making efforts, capturing a huge market for it. Therefore, fears of a crash in the crude oil prices have been expressed in view of the impetus given to the crude oil export.

Given the Brexit, Iran and warnings of recession, the economies of the Middle East countries dependent on the crude oil export might tumble if the crude oil rates crash, in the international market. Therefore, it is imperative for the Middle East countries to keep crude oil rates steady. Against this background, the initiative taken by Russia and Saudi becomes noteworthy. In the previous G-20 meeting, held in Argentina, Russia and Saudi had announced a reduction in the crude oil production. Even after the G-20 summit in Japan, Russian President Putin said that there was an agreement on reduction in crude oil production.

Putin indicated that this cut would be effective for the next six to nine months, whereas, Saudi has said that the cut will be for nine months. It is said that the final decision will be taken in the OPEC meeting, scheduled to be held in the next few days. Analysts claim that there will be a spurt in the crude oil prices, following this decision. A severe reaction could be coming from the United States, on this agreement between Saudi and Russia.