Russia and Saudi Arabia’s agreeing on the sidelines of the G-20 summit to cooperate in stabilizing the oil market predictably led to a spike in oil prices. But the rapidity with which they pared gains shows how long the road from cooperation to concrete action is.
As of now, the “strategic energy partnership” between the two oil giants is in the nature of a talk shop. True, both have reason to cooperate, with the low oil prices of the past two years hitting their economies. Other Organization of Petroleum Exporting Countries members have taken even more of a shellacking. They would certainly like to see this partnership inch towards a production freeze agreement.
But Iran stands in the way as it has since international sanctions were lifted in January. It has made it clear that it will consider a freeze only once it has regained its former market share. There’s the rub. Will Saudi Arabia be willing to cede ground to its rival? Unlikely.