Oil prices fluctuate due to collaboration between Saudi Arabia and Russia
Oil prices fluctuate due to collaboration between Saudi Arabia and Russia
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| According to the IEA, the alliance between Riyadh and Moscow is proving to be a formidable challenge for global oil markets. The partnership between Riyadh and Moscow is proving to be a
tough obstacle for the world's oil markets, according to the IEA. Oil prices
have the potential to drive economies into recession and increase inflation. International Energy Agency (IEA)The International Energy Agency (IEA) has issued a warning
that Saudi Arabia and Russia's reductions in oil output will cause a major
decline in the world's oil supply
by the end of this year. The threat will increase as long as oil prices remain
unstable. IEA's Monthly Market ReportThe alert was issued the day after the IEA's monthly market
report showed an increase in oil prices. The most recent increase in oil prices
follows an update
from the Organization of the Petroleum Exporting Countries (OPEC), which
predicted that the 2007 oil supply and demand imbalance will be the largest
ever. Saudi Arabia and RussiaThe IEA stated that the partnership between Saudi Arabia and
Russia was posing a significant threat to the oil markets. Following Russia's
invasion of Ukraine in 2014, oil prices have been
declining recently. To counter this, Saudi Arabia and Russia, friends in the
larger group of countries that produce oil, stated that they will continue
their voluntary restrictions
on oil production through the end of the year. According to a global
organization, the possibility of another price surge has increased since
neither oil producers nor consumers can afford it given the current state of
the economy. Recent Increase in Oil PricesA 1 million barrel per day reduction in oil output that
Saudi Arabia started in July has been prolonged until the end of the year. In
the same time frame, Russia has chosen to prolong the export cutback by 300,000
barrels per day. The recent increase in oil prices has sparked concerns that it
may increase inflation, forcing central banks to maintain high
interest rates for longer and causing countries to enter a recession. While
supply from nations outside of the cartel has climbed by 1.9 million barrels
per day, OPEC Plus output has so far decreased by 2 million barrels per day. As
a result, there will be a daily increase in oil supply of 1.5 million barrels. |
