Global oil market sensitive to Israel-Hamas war; Russia ready to boost supplies to Saudi Arabia: Novak

Saudi Arabia and Russia, the world's top two oil exporters, on Wednesday, October 11, discussed the situation on the oil market and prices amid the escalating conflict between Israel and Hamas, according to President Vladimir Putin's top oil official. Crude oil prices spiked over four per cent on Monday in the wake of a massive incursion into Israel from Gaza launched by the Palestinian Islamist group on October 7. 

Russian Deputy Prime Minister Alexander Novak met Saudi Arabia's Minister for Energy Prince Abdulaziz bin Salman in Moscow on Wednesday ahead of the "Russian energy week" conference in Moscow, which Putin will address, according to news agency Reuters.

Also Read: Oil snaps Israel-Hamas conflict-induced rally, slides over $1 on demand concerns; Brent eases to $86/bbl

Novak said he and Prince Abdulaziz discussed the oil market and cooperation within the Organisation of Petroleum Exporting Countries and its allies (OPEC+). "Of course, (cooperation within OPEC+) was (considered) at our internal meeting, one of the most important topics that we discussed today," Novak said, according to Interfax news agency.

Saudi Arabia and Russia have coordinated supply cuts in recent years to support oil prices. Kremlin spokesman Dmitry Peskov said it was difficult to overestimate Russia's coordination with Saudi Arabia and other partners on global oil markets amid the escalating conflict in the Middle East.

He told reporters that the visit of Prince Abdulaziz to Moscow provided an opportunity to look into current affairs. "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," Peskov said.

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Novak said at the start of the meeting that Russia was ready to boost oil product supplies to Saudi Arabia. Gulf states, which have their own major refineries, usually re-export Russian fuel. He also said that Russia was ready for cooperation with Saudi Arabia in nuclear energy, geological exploration and food supplies.

Saudi Arabia and Russia have agreed to continue with voluntary oil supply cuts of a combined 1.3 million barrels of oil per day, or more than 1 per cent of the global demand, till the end of the year, to support market stability.

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Saudi Arabia said earlier this week that it was working with regional and international partners to prevent the escalation of the situation in Gaza and neighbouring areas, and reaffirmed that it supports efforts to stabilise oil markets. Israel produces very little crude oil, but oil markets are worried that the conflict could escalate and disrupt Middle East supplies, worsening an expected deficit for the rest of the year.