Global oil markets reacted positively to the agreed production cuts by both Opec and non-Opec countries, with Brent crude rising to a 17-month high.
The Brent price rose above $55 a barrel in the days after non-Opec producers, including Russia, struck a deal on 10 December in Vienna to reduce oil production, reaching the highest price since July 2015.
Non-Opec countries agreed to 558,000 barrels a day (b/d) of cuts on top of the 1.2 million-b/d reduction being pushed through by Opec, which should return some balance to an oversupplied global market.
Analysts are bullish about the sustained recovery of prices in the near term, but there are several ways the strategy could be derailed.
UK bank Barclays forecasts Brent to average $57 a barrel in the first quarter of 2017 and increase to $62 in the second quarter. This compares with an expected average of just $45 a barrel for the whole of 2016.
Oil-exporting countries in the Middle East and North Africa (Mena) should see higher oil revenues at this level of price increase, despite the reduction of crude export volumes.
The about-turn by Saudi Arabia, the most influential Opec oil exporter, shows a clear shift in its oil strategy, having previously reacted to oversupply and lower prices by increasing production to retain market share.
This strategy was in part to hurt US shale oil producers, which typically have higher costs and must shut down production at lower prices. However, unconventional oil in North America proved resilient at lower prices and is likely to be the real winner if the market has a sustainable recovery in 2017.
Barclays warns there is a high risk of non-compliance as oil exporters follow through with the agreed cuts. Analysts had noted that some countries had already given the appearance of higher crude production by ramping up crude exports and reporting lower refinery runs before the agreement, without changing production levels. This would allow countries to report lower production without making material changes.
Regardless of the outcome of the cuts, the widespread agreement by both Opec and non-Opec countries surpassed even the most optimistic pre-negotiation forecasts and could spell a new era of cooperation between the worlds biggest oil players.
Production reports in January 2017 and beyond will give some indication to how strictly the big exporters abide by their agreed cuts.