A few days ago news emerged of a deal between Saudi Arabia and Russia to freeze oil output at current levels in a bid to shore up oil prices. What are the effects of the deal? And will it work? Essentially what is agreed is a freezing of production output, i.e. not an increase nor a decrease says Sijbren de Jong in this week’s edition of “the Centre on Global Interests (CGI) asks”.
That means production stays at the current level. In the short-term that does not mean anything for global oil markets. What is more, the catch to the deal is that it depends on whether Iran will join. Whereas a production freeze may be beneficial in the long run to OPEC’s struggling countries (e.g., Venezuela, Nigeria), Iran has good reasons not to join.
The full article can be read here.
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