Oil nears $90 for the first time in 2023

Oil prices hit a 10-month high of nearly $90 per barrel as Saudi Arabia and Russia extended their voluntary production and export cuts until the end of the year.

Brent crude prices surged around 6.5 per cent over the past week after Saudi Arabia, which leads the expanded OPEC+ cartel with Russia, decided to keep its one million barrels a day reduction in supplies to the global market until the end of December.

Russia has added its own voluntary export cuts in recent months.

The move has led to Brent rising above $90 a barrel for the first time this year on Tuesday. On Wednesday, it was trading at $89.67 per barrel. The basket of crude oil that India imports has averaged $89.81 per barrel this month, up from $86.43 in August, according to oil ministry data.

“Public sector oil companies had been recouping losses they incurred for holding rates when crude oil prices shot through the roof last year. In May, international oil prices and retail pump rates had come at par.

“But now with the prices rising, the difference between cost and retail prices will reappear,” an industry official said.

Sources said if international oil prices had stayed around USD 73-74 a barrel range, oil companies would have re-started daily price revision.