Brent crude prices breached a five-month high of U$112 per barrel on news that Saudi Arabia has purportedly offered Russia a deal for coordinated production.
In return, the Saudis want Russia to sever links with the Assad faction in Syria.
Saudi Prince Bandar bin Sultan is trying break the present deadlock in Syria by convincing the Kremlin to exit from the equation.
The influential Bandar heads Saudi Intelligence and is part of the ruling family.
He reportedly approached Russia’s Vladimir Putin about a joint Russia-Saudi strategy for oil production and price control.
An alliance between OPEC and Russia would cover 45 percent of global crude output.
Chris Skrebowski, editor of Petroleum Review, said: We are only one incident away from a serious oil spike. The market is a lot tighter than people think.
Source: Sydney Morning Herald