The Financial Times – guest post by Paul Spedding, former global co-head of oil & gas research at HSBC and a current advisor to Carbon Tracker.

OPEC’s proposal to cut production may boost oil prices the way the cartel intends, but until details of the agreement are properly communicated it’s hard to be sure of anything. Indeed, if history is any guide, these sorts of agreements rarely deliver because of indiscipline. Price recovery can consequently take a long time. However, that such an agreement was seen as necessary shows that the financial pressures caused by low oil prices are becoming painful, even for Saudi Arabia’s deep pockets.

These pressures ultimately could lead to higher prices although perhaps not as high as some in OPEC (and the oil industry) hope. This is because of US shale oil, something OPEC has not had to deal with during its previous attempts to increase prices. Shale has relatively short lead times and low associated costs and so can – in theory – react to price rises more quickly than conventional oil plays. Much will depend on how many drilling rigs and skilled oil men have been lost to the industry since the oil price crash but nevertheless, it is a possible moderating factor.

But should oil prices recover, what does that mean for the oil industry?

Read Paul’s full blog in The Financial Times here.