Recent movements by Russia and Saudi Arabia to extend oil production cuts through the end of the year are expected to tighten the global supply, potentially creating a notable deficit in the market as the year progresses into the fourth quarter, according to the International Energy Agency (IEA).
In its September briefing, the IEA described the Saudi-Russia partnership as a significant risk to the oil balance. The decision to prolong the coordinated cuts by a total of 1.3 million barrels per day has already driven futures higher and helped push benchmark Brent crude toward the $90 mark per barrel. Market observers note that this step shifts the supply outlook and elevates price volatility at a time when demand patterns remain uneven across regions.
Commentators highlighted that after a relatively quiet August for oil prices, Saudi Arabia and Russia renewed production restrictions, lifting the combined curtailment to 1.3 million barrels per day through year-end. This action contributed to Brent trading above $90 per barrel and is cited by analysts as a catalyst for the month’s price strength, reflecting tighter supply conditions and market expectations for the coming quarters.
Earlier in the week, November Brent futures traded on the London ICE exchange surpassed the $92 per barrel threshold, marking the strongest level seen since late 2022. Traders weighed the potential implications of persistent supply restraint against evolving demand signals and macroeconomic risks that could affect the trajectory of prices in the near term.
Previous analyses from major financial outlets had warned that the oil market could face a pronounced supply squeeze if production cuts extended through the autumn season, with some forecasts framing the situation as among the more acute deficits experienced in recent years. Market participants are closely watching how governments, producers, and buyers respond to the evolving balance, including potential hedging strategies and adjustments in strategic inventories. The broader context includes ongoing negotiations around spare production capacity and the potential for any future policy shifts to influence both supply and pricing dynamics in 2025 and beyond. [IEA briefing, September report]