The Saudis blinked. The latest deal — an agreement with Russia to cap oil output at January levels if they are joined by other large producers — will not rebalance the oil market immediately. The surge in prices last week was premature. But they blinked and that is all important. The myth of Saudi power is broken.

The real steps necessary to rebalance the market are yet to come. Saudi production must come down. Others may join in the process but a reduction of 3m barrels a day is necessary and most of that will have to come from Saudi Arabia. Stocks must be run off. That will take time. Iran must be welcomed back into the market. That process will be slow and even estimates that Iran can pump another 400,000 barrels a day this year look high. But Iran will come back eventually and need to be accommodated. The interests of other Opec member states, such as Venezuela and Algeria, must also be taken into account. The Saudis’ lack of respect for their fellow Opec producers over the past year has shaken many traditional alliances. The kingdom does not have that many allies.

China’s economic slowdown does not help, nor does austerity in Europe. But recessions end, and the combination of the coming elections in France and Germany, plus the disruptive impact of the migration crisis, should lead to more expansionist economic policies.