The Opec agreement: Russia’s role adds a geopolitical twist

The Opec agreement: Russia’s role adds a geopolitical twist:
"The consent of Russia and other non-Opec oil producers to production cuts of 558,000 barrels a day to support Opec members’ agreement on a 1.2mbd cut for the first six months of 2017 represents an important breakthrough whose strategic significance, both for the oil market and for Middle East geopolitics, should not be underestimated.

Three aspects of this agreement underlie its significance. First, it is clear that Saudi Arabia has permanently abandoned its market share-focused strategy and gone back to defending the price of oil. Second, all indications are that this agreement, in contrast to other Opec agreements in the past, will be sustained, perhaps even beyond the agreed period. And finally, the agreement may have opened an exceptional opportunity for President Vladimir Putin to further deepen Russia’s involvement in the Middle East.

It is clear that Saudi Arabia was the key driver in the year-long effort to reach a deal, as the country’s leadership began to doubt the efficacy of its market share strategy. Two factors in particular convinced the Saudi leadership to reconsider."

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