Here’s the good news: Russia and Saudi Arabia — groaning under the weight of their flood-the-market petroleum war, right at a time when demand for oil has plunged more swiftly and more deeply than at any point in history because of the COVID-19 economic shutdown — have agreed to end their feud and lower their daily output of crude by slashing production by a record 9.7 million barrels per day. The expectation is that per-barrel prices will be driven higher and give some relief to struggling U.S. oil producers.
The bad news: History tells us there is an excruciating temptation to cheat on these OPEC deals, and the April 12 agreement calls for the parties to exercise forbearance for a full two years. A lot can happen in two years.
There are other reasons for fossil fuel investors to curb their enthusiasm. The Economist, which closely follows the global oil industry, observed that “President Donald Trump … argued for the pact and said the industry would
