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Russia May Join Saudi Arabia In The World’s Biggest Energy Cartel

Saudi Arabia, February 21, 2018

A cartel of oil producing countries and its temporary partners may strike a more permanent relationship at the next meeting of the Organization of Petroleum Exporting Countries (OPEC) in June.

OPEC — an alliance of a dozen of the world’s largest oil exporting countries led by Saudi Arabia — and other non-member countries, including Russia, are currently working together to cut oil production to deal with an international oil glut, according to The New York Times.

The association has been largely successful at hitting its agreed production cuts, Reuters reports.

At OPEC’s June meeting, countries party to the cutback agreement are expected to discuss an extended partnership, if not join together OPEC indefinitely, United Arab Emirates’ Energy Minister Suhail al-Mazrouei, OPEC’s president, told Reuters.

“I think the potential is huge for cooperation, whether it is focused on the oil sector, or the broader energy sector,” Mazroui said. “I don’t want to concentrate on one country but definitely Russia is a very important partner in the group. But it is not only Russia, it is all the countries that have committed to deliver in this agreement [to decrease international oil production].”

The countries will continue to work together under the current agreement until the end of 2018.

OPEC’s production cuts have contributed to a boom in the United States’ oil industry. The cuts have kept global oil prices high as American drillers ramp up production and supply markets formerly dominated by Russia, Saudi Arabia and others.

The U.S. oil industry, also driven by the Trump administration’s rollback on regulations, is projected to surpass Russia and Saudi Arabia to become the world’s leading energy producer by the end of the year. The U.S. has not reached that level of output in nearly five decades, CNBC reports.