Saudi may have won an oil truce – but a greater conflict now looms

For the first time in months, the coronavirus panic was briefly demoted as the main news story on Sunday when OPEC and oil-producing non-OPEC nations agreed a deal to cut oil production by 9.7 million barrels a day – initially to stabilise and then hopefully increase prices. It is the most dramatic production cut in history and of course not unrelated to the pandemic itself.

Last month, demand collapsed as the global economy began to shut down but Russia shot down a Saudi opening proposal fearing it would give a boost to the American fracking industry. The kingdom’s de facto leader Crown Prince Mohammed bin Salman threw a characteristic hissy fit and immediately slashed prices to key markets while promising to pump oil at maximum capacity (an increase of about three million barrels a day). Overnight, oil prices plummeted by a third, the biggest drop in history.