Saudi Arabia and Russia agreed on Monday to cooperate in oil markets, saying they will not act immediately but could limit output in future, sending oil prices higher on hopes the two top producers would work together to tackle a global glut.
The joint statement was signed by the country's energy ministers in China on the sidelines of a G20 gathering and followed a meeting between Russian President Vladimir Putin and Saudi Deputy Crown Prince Mohammed bin Salman.
Russian Energy Minister Alexander Novak said the two countries were moving to a strategic energy partnership and that a high level of trust would allow them to address global challenges. His Saudi counterpart Khalid al-Falih said the agreement would encourage other producers to cooperate.
Oil prices soared almost 5 percent ahead of a news conference by the ministers but pared gains to trade up 2 percent by 1130 GMT as the agreement yielded no immediate action.
"There is no need now to freeze production ... We have time to take this kind of decision," Falih said.
"Freezing production is one of the preferred possibilities but it does not have to happen specifically today."
The Organization of the Petroleum Exporting Countries will hold informal talks in Algeria later this month, and is scheduled to meet officially in Vienna in November.
Several OPEC producers have called for an output freeze to rein in the glut, which arose as supplies from high-cost producers such as the United States soared.
The price collapse of the past two years has hit the budgets of major producers such as Russia and Saudi Arabia while leading to unrest and social tensions is smaller producing nations such as Venezuela and Nigeria.
OPEC's de-facto leader Saudi Arabia has also signaled willingness to cooperate as it faces budget pressures and seeks to float a stake in state-owned producer Aramco.
Any deal between OPEC and non-OPEC Russia would be the first in 15 years since Moscow agreed to cut production in tandem with the group at the turn of the millennium, although Russia never followed through on that promise.