From a 14-month low to a 40-month high in just under three months. That is oil for you. Oil has swiftly moved north from $65/bbl last week, to $71/bbl and rising. The latest trigger was provided by heightened tension in the Middle East and the intensified war of words between two key oil producers – USA and Russia.

Add Saudi Arabia’s unannounced target of $80/bbl, as reported by Bloomberg to the mix – and the recent rally starts making more sense. Saudi Arabia has long been committed to the OPEC deal and has made every effort to ensure compliance from other members, and Russia. Whether Saudis will go for a deeper cut in production remains to be seen – because there is rising apprehension amongst OPEC members on the continuity of the deal, with no end in sight.

The Aramco IPO is the main reason why Saudi Arabia may push for $80/bbl, and could go to extending the production cut, if the situation requires so. That however, may not be an immediate requirement, as dedicated compliance coupled with geopolitical added risk premium could do the trick for oil to rally faster than it has so far in 2018.

Another variable in the equation is stronger global economic demand, which is expected to add more to the tally than the OPEC impact. Mind you, the OPEC production cut has also meant increased US production – which has touched all time highs, as Shale production has taken off. The number of rigs is up 25 percent year-on-year in the US alone – and could add to the supply glut before Saudi’s target of $80/bbl is reached.

Recall that Russia has pledged with Saudi Arabia that together they would do “whatever it takes” to give comfort to the market. The rebalancing seems not to far off in the wake of recent events. Barring any untoward event in the Middle East in terms of security situation, the shale-OPEC seesaw is nearing its logical end, which could see an end to the current production cut deal. Once the Aramco IPO is out of the way – most analysts expect the bigger players to give a tough time to shale players. But for now, $80/bbl stands a fair chance, and soon.