Saudi Arabia, Russia and their oil-producing allies announced on Sunday that they would cut production by more than 1.2 million barrels of crude a day, or more than 1 percent of world supplies, in an apparent effort to increase prices.
Oil prices soared as markets opened Sunday evening, with both the American and global oil benchmark prices rising by 7 percent.
The production cut was unexpected because leaders of the group, known collectively as OPEC Plus, said in recent days that they did not intend to make changes in their policies. While the announcement was a surprise, its significance may ultimately be slight, especially if the global economy slows.
The alliance produced nearly two million barrels below its supply target in February, the last month for which official output figures are available. “We expect shortfalls to continue,” said Ha Nguyen, a global oil analyst for S&P Global Commodity…