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- Brent crude surpassed $90 a barrel for the first time since November on Tuesday.
- Oil prices climbed after Saudi Arabia and Russia committed to further production cuts until December.
- The move will hold total output at about 9 million barrels a day, the lowest level in years.
Oil prices soared more than 1.3% Tuesday to hit their highest mark in 10 months, with Brent crude, the international benchmark, breaching the $90 a barrel threshold for the first time since last November.
West Texas Intermediate crude oil, meanwhile, traded at about $87 a barrel, also a 10-month high.
The jump in prices followed a statement published by state-run Saudi Press Agency that declared Saudi Arabia and Russia would prolong their oil production cuts for another three months until December.
It was a more aggressive move than traders had expected from the two biggest OPEC+ producers, and it will hold output at roughly 9 million barrels a day for six months, the lowest level in years.
Saudi Arabia will keep in place its voluntary cut of 1 million barrels a day.
"This voluntary cut decision will be reviewed monthly to consider deepening the cut or increasing production," according to the media statement, per Bloomberg.
The Kingdom had first introduced its supply cut in July, going further than other members of OPEC+ in a bid to support global oil prices. Industry experts had expected just one more month of cuts from the Saudis, rather than the three announced Tuesday.
"With the production cut extended, we anticipate a market deficit of more than 1.5 million bpd in 4Q23," UBS strategists wrote in a note to clients, per CNBC. "So, with oil inventories set to fall further over the coming months, we expect Brent to rise to $95/bbl (barrel) by year-end."
Brent futures have climbed more than 25% since the end of June, when Riyadh made its first voluntary cuts.
Last week, Bloomberg reported that Russia Deputy Prime Minister Alexander Novak told President Vladimir Putin that Moscow would curb its crude exports by 500,000 in August, then by 300,000 in September.
All the while, global energy demand has ramped up near record levels. Oil prices have remained tempered due to mounting concerns around China's economy. Beijing is contending with deflation, a wobbling housing sector, and historic youth unemployment.