Saudi Arabia and Russia agreed to cooperate and create a "working group" in order to stabilize the market. The announcement was made on Monday at the G-20 summit in China, only a few weeks before the informal OPEC talks to be held in Algiers on 26-27 September.
However, the two largest oil producer has not announced any concrete plan of action. Some analysts doubt whether the result is actually the cooperation plan at least to some decision, especially considering that Khalid al-Falih, oil minister of Saudi Arabia, said that he sees no urgent need to freeze production.
In addition, the team Capital Economics noted that most members of OPEC and Russia already produce oil at a record high, which indicates that they left little spare capacity.
Saudi Arabia and Russia are not far from the economic chaos, which covered the country's so-called "low five" which includes Nigeria, Venezuela, Libya, Iraq and Algeria. Major oil producers report that their economic situation has worsened over the past two years.
Russia's economy shrank by 3.7% in 2015 and, although the economy began to stabilize, the IMF predicts that growth should be expected to reduce by 1.2% in 2016. Currently, 13.4% of Russia's population lives in poverty (about 19.2 million), according to data presented in March 2016.
Meanwhile, Saudi Arabia, too, can boast of a lack of problems. Foreign exchange reserves fell by almost $ 190 billion, after oil prices began to fall. Bloomberg reports that the country intends to cancel projects worth more than $ 20 billion and cut the budgets of the ministries in the quarter.
In the past, attempts to limit the volume of production does not always give the desired results. Nevertheless, the fact that even the big manufacturers have begun to feel the difficulties of economic growth gives hope to achieve their goals.
Based on materials WELTRADE