Oil prices soared this afternoon as US president Donald Trump said that Saudi Arabia and Russia had agreed a deal to end their price war and curb production.
Brent Crude shot up nearly 22 per cent within half an hour of the president’s revelation, which was made over Twitter.
The benchmark is now trading at $30.11 a barrel, having been changing hands at 18-year lows only on Monday.
West Texas Intermediate also climbed rapidly, rising over 25 per cent to stand at $25.39.
On Twitter, Trump wrote: “Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, and I expect and hope that they will be cutting back approximately 10m barrels, and maybe substantially more which, if it happens, will be great for the oil and gas industry!”
He added: “…..Could be as high as 15m barrels. Good (great) news for everyone!”
Trump’s announcement came as Saudi Arabia called for an emergency meeting of oil producer cartel Opec and its allies, including Russia, to discuss measures to stabilise prices.
Prices have been in free fall since last month’s Opec meeting, at which Russia opposed calls to deepen production curbs in response to the lack of fuel demand caused by the coronavirus pandemic.
As a result of Russia’s objections, Saudi Arabia removed all the restrictions on its own production, quickly swamping an already saturated market and forcing prices into decline.
As a result, prices, which had earlier in the year traded above $70, shed two-thirds of their value as the war between the two energy giants continued.
Earlier today Russian energy minister Alexander Novak told Reuters it had no plans to crank up its crude output.
The rise carried US markets upwards with it, with the S&P 500 up nearly two per cent on the back of the news.
The FTSE 100, which is heavily weighted towards oil giants such as Shell and BP, also rose back into the black.