There was hardly any surprise when the Vienna meeting between the OPEC countries and Russia failed to reach a consensus on supply cuts. This led Saudi Arabia to adopt a policy of flooding the world with cheap oil. Let us first understand why the Vienna talks failed? In many ways, the Vienna talks were a non-starter. The OPEC and Russia had been jointly cutting oil supply by 2.1 million bpd for more than a year now. With the fall in Chinese demand, OPEC was demanding an additional cut of 1.5 million bpd taking the total cut to 3.6 million bpd. That is where the problem arose. Russia was not clearly willing to commit itself to such a high supply cut. Russia knew well that any price rise at this point would benefit the US and give its shale companies a life line for the future. As it had happened in the past, the OPEC and Russia got nothing from the supply cuts but US shale industry benefited.