Riyadh and Moscow are considering extending Russia’s current short-term alliance with OPEC to curb oil production that began in January 2017 after a crash in crude prices, Reuters reported.
“We are working to shift from a year-to-year agreement to a 10-to-20-year agreement,” Crown Prince Mohammed bin Salman told Reuters in an interview in New York late on Monday. “We have agreement on the big picture, but not yet on the detail,” he added.
Saudi Arabia spearheaded OPEC’s coalition with Russia and other non-OPEC countries to help reduce oversupply when oil prices collapsed to below $30 a barrel in 2016 compared to above $100 a barrel in 2014.
Crude has since recovered to roughly $70 a barrel but is facing significant threats from the US shale industry.
The announcement comes amid two other important developments for Saudi oil. On March 27, Saudi Aramco signed $10 billion worth of agreements with US firms for upstream equipment and services and cyber security. Aramco is also currently preparing to offer their IPO on an international stock exchange, constitute 5% ($100 billion) of their total worth ($2 Trillion).