What are we to make of last week’s deal to freeze oil output between Saudi Arabia and Russia – the world’s two leading crude exporters? Is it significant and is the price of oil now likely to rise?
This agreement is remarkable in the sense that there typically isn’t much love lost between Riyadh and Moscow. While Saudi has traditionally been the beating heart of Opec, Russia has always sat staunchly outside the 56-year old oil exporters’ cartel, just like the Soviet Union before it. The fact that the Desert Kingdom has long been a US-ally (albeit to varying degrees) has also helped stoke Russo-Saudi tensions.