In the town where Napoleon ended his advance into Russia in 1812 and began his long retreat, his opponents put up a plaque reading “end of offensive”. The Centre International de Conférences d’Alger in Algiers, where Opec ministers agreed a change of strategy last month, deserves a similar memorial to the oil price war that began in 2014. 

The cut in Opec’s oil production announced by the ministers has yet to be implemented. But merely by agreeing they needed to pump less oil, the cartel conceded that its attempt to force rival producers out of the market is not working. The oil price war may not be over but it looks as though fortunes are shifting. 

When Saudi Arabia, Opec’s de facto leader, sent prices tumbling in 2014 by refusing to cut crude production in the face of a growing global glut, some expected that the US industry would swiftly collapse. Since 2008, oil production in the US has been transformed by advances in hydraulic fracturing, or fracking, and horizontal drilling, which made it viable to extract crude from previously unprofitable shale rock. But US producers had relatively high costs, and had been unable to cover their capital spending from their cash flows, relying on a steady supply of debt and equity capital to stay in business.