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Saudi Arabia’s prisoner’s dilemma

After six months of leading the way on production cuts, Saudi Arabia has slowly begun to increase production. Output for OPEC has experienced month-over-month declines since December after the cartel agreed that cutting back production was in its best interest amid price declines driven mostly by U.S. shale oil output.

Saudi Arabi accounts for about one-third of total OPEC production and has been responsible for most of the cuts since the agreement. This course reversal could mean that the country is already losing faith in the agreement and will begin to act more in its own interest, particularly if oil prices continue to rise.