Prices which were trading below $30 have risen to trade between $60 and $85 a barrel.
The United States has not agreed to the production cuts. In fact, its output is seen to increase, making it the highest producer of oil.
To keep oil prices within the price range of $60 and $70 per barrel, the pact made by the OPEC + countries should continue till the end of the year, says Azerbaijan President Ilham Aliyev.
Saudi Arabia and Russia had met in December to discuss oil production. The Energy Minister Alexander Novak from Russia will not be attending the Davos meeting, citing changes in his schedule. Similarly, top energy minister Khalid Al-Falih of Saudi Arabia is not expected to attend the World Economic Forum, though not confirmed.
Hence, the face-to-face meeting that was to take place between the two leaders will not take place.
Many other world leaders have also skipped the meeting at the Alpine resort. Global leaders like U.S. President Donald Trump, France President Emmanuel Macron and U.K. Prime Minister Theresa May have canceled their visit to the forum.
Russian President Vladimir Putin will return to Saudi Arabia, later this year to talk about the production cuts.
The production cuts have been an important reason for the increase in crude oil prices and this has brought additional revenue by $110 billion, says Krill Dmitriev, head of Direct Investment Fund.
Speaking from the Davor Forum, Dmitri Says that it is best to not be competitive with the U.S. regarding shale production, as it would be too costly. It will also result in lower oil prices, he says.
Oil prices hit a two-month high recently and in now easing with a slowdown in global trade, led by the trade war.