DUBAI, United Arab Emirates (NEWSnet/AP) — Saudi Arabia and Russia agreed Tuesday to extend their voluntary oil production cuts through the end of this year, trimming 1.3 million barrels of crude out of the global market and boosting energy prices.

The dual announcements pushed benchmark Brent crude above $90 a barrel in trading Tuesday afternoon, a price unseen in the market since November.

The average gallon of regular unleaded gasoline in the U.S. stands at $3.81, according to AAA, just under the all-time high for Labor Day of $3.83 in 2012. However, gasoline demand typically drops for U.S. motorists after the holiday so it remains unclear what immediate effect this could have on the American market, an AAA spokesman said.

As to why Saudi Arabia and Russia made the decision, higher oil prices funnel more funds into their coffers

The Saudis are particularly keen to boost oil prices in order to fund Vision 2030, an ambitious plan to overhaul the kingdom’s economy.

Higher oil prices would also help Russian President Vladimir Putin fund his war on Ukraine. 

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