Saudi Arabia and Russia on Wednesday said they would maintain their voluntary oil production cuts to year-end, as tightening supply and rising demand support oil prices.
The announcements could further prop up oil prices, which are hovering around $90 a barrel. Production cuts first announced by Saudi Arabia and Russia in July have driven up prices at the pump, enriched Moscow's war chest and complicated global efforts to bring down inflation.
The Saudi and Russian statements come hours before a ministerial monitoring panel of the OPEC+ group of leading oil producers convenes online later on Wednesday.
The panel, called the Joint Ministerial Monitoring Committee, can call for a full OPEC+ meeting if warranted but sources have told Reuters it is unlikely to tweak current oil output policy.
Oil prices continued a downward trend directly following the news with Brent futures falling $1 to $89.92 a barrel, but they were trading at $90.40 a barrel by 8:54 a.m. GMT.
OPEC+, which comprises the countries of the Organization of the Petroleum Exporting Countries (OPEC) and leading allies including Russia, has been cutting output since last year in what it says is preemptive action to maintain market stability.
The U.S. and Western allies have argued that the world needs lower prices to support economic growth and the global economy.
Saudi Arabia, the OPEC de facto leader, said it would continue with its voluntary oil output cut of one million barrels per day (bpd) for the month of November and until the end of the year and that it would review the decision again next month.
The kingdom's production for November and December will be approximately 9 million bpd, the Energy Ministry said in a statement.
"This voluntary cut decision will be reviewed next month to consider deepening the cut or increasing production," the statement said.
Saudi Arabia is counting on high oil prices to help fund Vision 2030, an ambitious plan by Crown Prince Mohammed bin Salman (MBS) to overhaul the economy, reduce the kingdom's dependence on oil and create jobs for young people.
Saudi Arabia first implemented the additional voluntary cut in July and has been renewing it monthly.
It said in September the cut would last until year-end but would be reviewed on a monthly basis.
Russia has agreed to undertake two separate voluntary reductions in oil supply: in April it decided to cut crude output by 500,000 bpd until the end of 2024, while in August it said it would reduce exports by 300,000 bpd until the end of this year.
The Saudi and Russian additional voluntary cuts come on top of April cuts agreed by them and several OPEC+ producers, which extend to the end of 2024.
Deputy Prime Minister Alexander Novak said on Wednesday Russia would consider next month whether to deepen its voluntary oil production cuts or increase output.
Novak said that Russia will continue the voluntary export cut of 300,000 bpd until the end of December too, as previously announced.
On output, he said: "Next month, a market analysis will be carried out in order to make a decision on whether to deepen the reduction or increase oil production.
"This is in addition to the voluntary reduction previously announced by Russia in April 2023, which will last until the end of December 2024."
Novak reiterated that Russia's additional voluntary cut is aimed at reinforcing efforts by OPEC+ countries to maintain stability and balance in oil markets.
The reduction of 500,000 bpd accounts for around 5% of Russia's total oil production. Russia suspended publishing its official data on oil output until April 2024.
Energy Minister Nikolai Shulginov said last month that Russian oil production was seen declining by 1.5% to 527 million metric tons (10.54 million barrels per day) this year from 535 million in 2022.