After hitting a session high of $78.73 a barrel earlier in the day, Brent oil futures were trading at $78.42 a barrel at 2219 GMT, up $2.29, or 3%.
Hours after the world’s top exporter Saudi Arabia promised to decrease output by an additional 1 million barrels per day starting in July, oil prices increased by more than $2 a barrel in early Asian trade on Monday.
At 2219 GMT, Brent oil futures were trading at $78.42 a barrel, up $2.29 or 3% from the session high of $78.73.
After reaching an intraday high of $75.06 per barrel, U.S. West Texas Intermediate crude increased $2.27 per barrel, or 3.2%, to reach $74.01 per barrel.
Saudi Arabia’s energy ministry announced in a statement that its output would experience its largest dip in years, from about 10 million barrels per day (bpd) in May to 9 million bpd in July.
Saudi Arabia’s voluntary cut comes on top of a larger agreement made by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, to limit supply until 2024 in an effort to revive falling oil prices.
The so-called OPEC+ group produces almost 40% of the world’s petroleum and has pledged to decrease 3.66 million bpd, or 3.6%, of demand worldwide.
The most recent revision to quotas had only been in effect for a month, so the Saudi move “is likely to come as a surprise,” according to ANZ analysts.
“It now appears that the second half of the year will see even tighter conditions on the oil market.”
