Russia and Saudi Arabia discuss effect on oil price of Hamas-Israel crisis
Saudi Arabia and Russia, the world’s top two oil exporters, met on Wednesday to discuss the global market amid fears the conflict between Israel and Hamas could drive crude prices to $100 a barrel.
Before the meeting, the Kremlin’s spokesperson, Dmitry Peskov, stressed the importance of Russia’s coordination with Saudi Arabia and other partners on global oil markets as the crisis in the Middle East escalated.
“Of course, the global oil markets are very sensitive to the events that are currently unfolding around the Palestinian-Israeli conflict, and of course, in this case, our coordination with the Saudis and our other partners ... is difficult to overestimate its importance,” he told reporters.
Russia’s deputy prime minister, Alexander Novak, the Kremlin’s top oil official, and the Saudi energy minister, Prince Abdulaziz bin Salman, met in Moscow ahead of Russia’s energy week conference.
The Hamas’s surprise attack last weekend ignited a surge in the global benchmark oil price, which rose by almost $4 a barrel, or more than 4%, to $88 as traders speculated that a wider escalation of the conflict across the Middle East region could disrupt supplies.
Magid Shenouda, the deputy CEO of the commodity trading giant Mercuria, told an industry conference in the United Arab Emirates on Wednesday that the oil price could go toreach $100 a barrel if the situation in the Middle East escalated.
“I don’t think there are that many analysts that believed that it was going to go to $100 in a normal circumstance. I think the events that have happened recently put a great cloud [over] where things could go,” Shenouda said.
Global oil Crude prices rose to $90 a barrel last month after the oil super powers world’s major producers announced that they would extend their coordinated production cuts until December to shore up prices.
Saudi Arabia and Russia agreed to withhold a combined 1.3m barrels a day, or more than 1% of global demand, from the market until the end of the year in a move that frustrated world leaders struggling against economic inflation.
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Saudi Arabia said on Tuesday it was working with regional and international partners to prevent an escalation of the situation in Gaza and Israel, and reaffirmed that it supported efforts to stabilise oil markets.