OPEC and Russia are working on a long-term deal to cut oil supply that would last 10 to 20 years, Saudi Crown Prince Mohammed bin Salman said on Tuesday morning.
Salman, who is visiting the U.S. this month, told Reuters Saudi Arabia and Russia are considering extending an agreement between OPEC and non-OPEC nations such as Russia that began in January 2017 to drive up oil prices.
“We are working to shift from a year-to-year agreement to a 10-20 year agreement,” the crown prince said in an interview in New York. ”We have agreement on the big picture, but not yet on the detail.”
Crude oil prices have recovered to $70 per barrel from below $30 in 2016, but energy experts have speculated the historic surge in U.S. output could limit the price surge.
The U.S. is anticipated to experience “explosive growth” in oil production in 2018 and will surpass Saudi Arabia’s output for the first time, the International Energy Agency reported in January. The U.S. is expected to reach a historic high above 10 million barrels of oil production per day, an amount that would overtake Saudi Arabia and rival Russian oil production.
Combined, the three countries represent more than one-third of global oil production.
The Trump administration has sought to expand energy ties with Saudi, even as it depends less on foreign oil.
The administration has been holding talks with Saudi Arabia on supplying it with U.S. nuclear energy expertise to help it develop nuclear power. The development of nuclear has become a high-profile concern for the kingdom since it initiated an aggressive economic reform plan in 2016 to diversify its economy away from crude oil.
Sustained low oil prices have forced the oil-rich kingdom to consider new sources of revenue, as its oil-fueled budget has been cut in half over the last three years.
