Saudi Arabia's energy minister said that Russia has helped to breathe new life into OPEC and that shale can be a major contributor to the market in years to come.
"We welcome the contributions of shale as demand approaches 100 million barrels (per day) next year and continues rising," Saudi Arabia Energy Minister Khalid Al-Falih told CNBC on Thursday.
"In the years and decades to come, we want shale to continue to be a major contributor but we believe the pace of its growth will be more important."
Speaking at a CNBC-moderated plenary session at Russia Energy week 2017, Al-Falih said that certain market predictions that shale producers would bounce back at certain price points had proven incorrect.
"We believe that the unreasonable expectations that shale will somehow spring up at certain prices and grow exponentially has been proven to be way unrealistic."
The price of oil collapsed from around $114 a barrel in June 2014 due to weak demand, a strong dollar and booming U.S. shale production. OPEC's reluctance to cut output was also seen as a key reason behind the fall. But, the oil cartel soon moved to curb production - along with other oil producing nations such as Russia - in late 2016.
Daniel Yergin, vice chairman of research firm IHS Markit, also spoke on the shale market at the same panel, saying that "every time you have a big new increment of oil coming to the market, it tends to lead to a price collapse."
"And in a sense we saw that now. What is different now is that now it is no longer this mysterious new thing. Shale, this short cycle oil, is part of the market," he said.
Al-Falih highlighted Thursday the role that Russia had played in stabilizing the market since 2014.
"This partnership between Russia and Saudi Arabia has catalyzed cooperation of an unprecedented coalition of 24 countries (OPEC and non-OPEC). It has breathed back life into OPEC which found itself, quite frankly, unable to swing its production as supply was persistently high in 2014 and global inventories were steadily rising ahead of demand," he said.
Al-Falih was optimistic that oil markets were continuing to rebalance, but added prices were not for him or his counterpart, the Russian Energy Minister Alexander Novak, to determine.
"(Prices) are ultimately for the markets to determine based on marginal cost of productions and expectations of supply and demand. But as I think of fundamentals I am more optimistic than I have been in the last two or three years, demand is healthy around the world in developed and developing countries."
Although prices have stabilized somewhat in markets from a low point of around $27 in early 2016, they are a long way from their peak price of $114 a barrel seen in June 2014. On Thursday, benchmark Brent crude was trading at $56.06 a barrel and West Texas Intermediate (WTI) at $50.05.
Al-Falih said it was a work in progress to balance markets and the job was not yet done.
"We're not going to get complacent, we're not going to celebrate any time soon," he said.
Russia is rolling out the red carpet for King Salman of Saudi Arabia this week, with the monarch leading a high-profile and highly significant delegation to Moscow.
The Kremlin said that King Salman was due to meet Russian President Vladimir Putin on Thursday and "the leaders will consider joint steps to further develop bilateral cooperation in the trade, economic, investment and cultural-humanitarian areas."
The leaders are set to sign joint investment deals worth more than $3 billion on Thursday, Russian Energy Minister Alexander Novak told the Financial Times on Wednesday, including a $1.1 billion agreement for Russian petrochemical firm Sibur to build a plant in Saudi Arabia.
The visit is just the latest sign of increasingly cordial relations and closer economic and political ties between the two oil giants. The countries embarked on a closer relationship last year when Russia and the 14-member oil-producing organization OPEC – with Saudi Arabia being its de factor leader – announced they would restrict oil output in a bid to support global oil prices.