Extending Alliance, Oil's Big Two Seek Smooth Exit From Cuts

Keeping ‘some level’ of curbs makes sense, Qamar’s Mills says
Oil rally threatening demand, may spur shale, Petromatrix says

A worker turns a flow valve near oil storage tanks at a pumping station, operated by Rosneft PJSC, in the Samotlor oilfield near Nizhnevartovsk, Russia, on Monday, March 20, 2017. Russia's largest oil field, so far past its prime that it now pumps almost 20 times more water than crude, could be on the verge of gushing profits again for Rosneft PJSC.Photographer: Andrey Rudakov/Bloomberg

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By Anthony Di Paola

January 22, 2018 at 6:43 PM UTC

Updated on

January 23, 2018 at 5:40 AM UTC

This article is for subscribers only.

The pledge Saudi Arabia and Russia made to keep working together on managing the oil market beyond 2018 shows the two energy giants are now looking to engineer an orderly exit from the deal and avoid crashing the prices they’ve worked so hard to revive.

“Keeping some level of production cuts into 2019 is the kind of thing that makes sense,” said Robin Mills, chief executive officer of Dubai-based consultants Qamar Energy. “Just abandoning the deal at the end of 2018 would put a lot of oil back on the market.”