East Africa – East African nations are currently facing a significant surge in fuel prices as a result of a joint decision by Saudi Arabia and Russia to extend their removal of 1.3 million barrels of crude oil per day from the global market. This move has caused crude oil prices to soar by 18 percent, reaching a high of $90 per barrel, the highest level seen since November.
The spike in fuel prices has sent shockwaves through the region, raising concerns about its potential impact on inflationary pressures and the financial burdens placed on households and motorists at the pump.
The decision to extend the oil production cuts was announced last week, and it has immediately reverberated through the global oil markets. The benchmark Brent crude oil price surged by 18 percent within three months, rising from $76.47 per barrel on June 5 to $90.04 per barrel. This sudden increase has left consumers across East Africa bracing for higher fuel costs, which could lead to increased transportation expenses and overall cost of living.
Saudi Arabia’s state-run press agency, the Saudi Press Agency (SPA), reported that the Kingdom and Moscow have reached a new agreement to extend the voluntary oil production cuts of 1.3 million barrels per day through the end of the year. This decision aims to support crude oil prices, which have been struggling in recent months. Additionally, Saudi Arabia emphasized its commitment to monitoring the market closely and taking further actions if necessary to stabilize prices.
Before this recent surge, Brent crude had primarily traded within the range of $75 to $85 per barrel since October of the previous year, according to data from the Associated Press.
It is worth noting that Russia and Saudi Arabia are key members of the Organization of Petroleum Exporting Countries (OPEC) and its allies. Their decisions regarding oil production cuts have significant implications not only for East Africa but also for the global energy market as a whole.
East African governments and businesses are closely watching the evolving situation, as they navigate the economic challenges posed by the sudden increase in fuel prices. The region will continue to grapple with the repercussions of this joint decision by two major oil-producing nations in the months ahead.