GOOD: Russia’s Oil Cuts Are About To Get Harder.

No petrostate is excited about voluntarily constraining their production, but those limits can often be useful if they help push oil prices up. OPEC and a collection of eleven other oil producing nations agreed last November to collectively reduce their output through the first six months of this year, and Russia played a big role by agreeing to join those cuts. However, as the end of that first cut looms large and its participants begin to discuss extending that strategy through the end of the year, Moscow’s ability—or maybe more accurately its willingness—to play ball is going to be tested. That’s because, as Bloomberg reports, the seasonal vagaries of Russian oil production make it easier to cut supplies in the first half of the year than in the second. . . .

In other words, Russian output is going to surge in the second half of this year, which means any supply limitations it agrees to will bite harder.

The Saudis remain the lynchpin of this agreement, but Riyadh knows how important Moscow is to the plan, whose intent is to reduce the global glut of crude. Saudi energy minister Khalid Al-Falih told Bloomberg that petrostates are working towards a consensus, but acknowledged that “we still need to talk to all countries…a very important country to talk to, of course, is Russia, the biggest non-OPEC exporter.”

The stakes are high for these producers—if they don’t agree to continue their production cuts, analysts believe the price of oil could drop back down to $40 or below.

That would be terrible. Remember when Barack Obama said we couldn’t drill our way out of our energy problems?