Russia and Saudis continue to manipulate the supply of oil to prop up prices

Washington Examiner:

Oil giants Russia and Saudi Arabia's efforts to extend a deal, which is aimed at cutting supply for another 10 to 20 years to drive up prices, won’t scare off surging U.S. shale production, experts say.

But a long-term pact by the world's top two crude oil producers would effectively formalize an alliance between them, strengthening Moscow’s position in the Middle East, where the U.S. has long been the dominant superpower.

“This would no longer be an agreement, but rather a permanent relationship,” said Ellen Scholl, deputy director at the Atlantic Council’s Global Energy Center. “From Russia’s perspective, I would assume this is a part of broader competitive front against the U.S. You see the U.S. nipping at the heels of the Russians and Saudis as the dominant crude producers in the world, which certainly changes things. But if you look at where the U.S. is and projecting to go, it will continue to remain one of biggest suppliers into international markets, regardless of what the Saudis and Russians do.”

OPEC and Russia are working on a long-term deal to cut oil supply, Saudi Crown Prince Mohammed bin Salman said Tuesday morning.

Salman, who is visiting the U.S. this month, told Reuters that the kingdom and Russia are considering extending an agreement between OPEC and non-OPEC nations such as Russia that began in January 2017 to drive up oil prices.
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The US shale revolution has forced their hand.  OPEC once controlled oil prices and Russia was a free rider in that operation.  With the US becoming a major exporter OPEC and Russia lost control of the market and were forced to join in manipulating the supply to prop up the price after their efforts to kill shale oil with predatory pricing.

Ironically, the US producers benefit from the price manipulation.