Oil price jumps on Russian and Saudi agreement

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Oil-refining plant located in Belarus's town of Mozyr, some 300 km south-east of Minsk, is seen Tuesday, Jan. 9, 2006. Image copyright AP

The price of oil has jumped by about 3% after Russia and Saudi Arabia reached an agreement to look for ways to stabilise the oil market.

The announcement was made by the countries’ energy ministers, Alexander Novak and Khalid al-Falih.

The price of Brent crude oil rose by $1.28 on the news to $48.11 a barrel.

A statement said the plan was to support the “stability of the oil market… ensuring a stable level of investment in the long term.”

Mr Novak said the cooperation might include attempts to limit oil output.

Such strategies are usually the preserve of the established oil producers’ cartel OPEC and are often not successful.

However Russia and Saudi Arabia are the world’s two largest oil producers.

The outline agreement, to set up a joint task force, was publicised at a news conference at the G20 summit taking place in the eastern Chinese city of Hangzhou.

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