As I write, the world’s leaders are meeting at the G20 summit in Argentina. There are, as always, lots of story lines surrounding the meeting, some financial in nature such as the chance of informal trade negotiations, and some not so much, such as whether Donald Trump’s cancellation of his private meeting with Vladimir Putin indicates the end of their bromance. For energy investors though, the meeting will be watched with a different focus. Both Saudi Arabia and Russia are in attendance, so they will be watching for any signs of an agreement to cut oil output.

That question is being asked because of current circumstances. Crude oil has been in freefall, with both Brent and WTI having lost around a third since hitting highs in early October. There are some demand related worries involved as trade wars threaten to slow global growth, but the biggest reasons for the drop are supply related. A couple of months ago, those highs were achieved in anticipation of a disruption to global supply as the Trump administration’s abandonment of the Iran nuclear deal with Iran and the resulting sanctions took effect.

Since then though, a few things have become clear. Firstly, U.S. production has been stepped up by more than imagined. In addition, the Saudis increased their output to help offset the expected loss from Iran but, most importantly in that context, that loss doesn’t look likely to materialize. Despite a lot of tough talk, the sanctions on Iranian…