With all that is going on in the world right now protracted trade wars, Iran sends ballistic missiles into Syria and the ongoing investigation Trump certainly has his hands full. The latest news on the proposed Saudi and Russian oil deal is more fuel to the fire.
In a recent article by CNBC in which they described the deal as ´unparalleled´has the full back of the intergovernmental organisation OPEC. Both countries in recent years have done their very best to limit supply in order to clear a global overstock and regulate prices.
Now both countries want to come to a deal that could hold sway over world crude supplies for the next 10 or 20 years. On Monday, Saudi Arabia's Crown Prince, Mohammad Bin Salman, told Reuters: "We are working to shift from a year-to-year agreement to a 10-20 year agreement."
The deal is yet to be concluded as Russia and Moscow look to thrash out the last few details, the deal is unrivalled and would see them have unprecedented control over major exporters for years to come.
OPEC is working on a "very long-term" deal to try to extend its alliance with other oil producers, Secretary General Mohammad Barkindo said at an energy conference in Baghdad, Iraq on Wednesday. OPEC would like a pact with Russia 'very much'
OPEC who have backed Russias production-cutting deal all the way are looking to make this a more permanent arrangement, with the goal of thwarting the downturn and keep oil market as stable as possible. Although, a ten to twenty-year deal is unheard of.
Secretary-General of OPEC, Mohammed Barkindo (R) and Saudi Arabia's Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih (L) hold a joint press conference during the 173rd Ordinary Meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria on November 30, 2017.
"I think it's certainly something that OPEC would like very much … And I think the agreement that they struck — that is with OPEC and non-OPEC members — actually took them quite a large step towards that," Colin Smith, oil analyst at Panmure Gordon, told CNBC Wednesday.
"I think getting to a fully-fledged agreement in which Russia becomes a de facto member is a bit of a push at the moment," he added. The ongoing agreement between OPEC and allied non-OPEC producers to reduce oil output by 1.8 million barrels a day is set to extend through the end of the year.
The agreement has seen oil prices pull back from an all-time low of $30 a barrel in 2016 to above $60 a barrel, and OPEC's Barkindo has since described the agreement — which will be reviewed in June — to be "as solid as the Rock of Gibraltar."
The deal will then be reviewed again in December.
"While we wait to see if an unparalleled decades-long agreement between so many producers can be achieved, one thing seems certain — there is no expiration date in sight for the Saudi-Russia romance," Stephen Brennock, oil analyst at PVM oil associates, said in an email on Wednesday.
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