Moscow, Riyadh eye long-term oil policy coordination
DUBAI/MOSCOW: Russia and Saudi Arabia praised their growing partnership in oil markets and dialogue on Syria yesterday, in a formidable departure from past hostilities between top global producers and major players in the Middle East. Russian President Vladimir Putin poured praise on Deputy Crown Prince Mohammed bin Salman, who looks after the kingdom’s defense and energy, as he welcomed him at the Kremlin.
It was the second meeting between the two men over the past year following a breakthrough meeting in China, where Putin and Prince Mohammed showed the first signs the world’s two biggest oil exporters could clinch a deal to prop up oil prices. Non-OPEC Russia has long opposed any cooperation in reducing oil output in tandem with OPEC, where Saudi Arabia is a de-facto leader.
Russia’s military campaign in Syria to support President Bashar Al-Assad in the past two years has effectively pitted the Kremlin in a direct military confrontation with Saudi Arabia as the Sunni kingdom has long fought for Assad’s removal. But the oil prices plunge in the last two years has overstretched the budgets of both producers, making joint cuts more likely, especially with Russia facing a presidential election next year and Saudi Arabia requiring higher prices for economic reforms and the listing of its energy giant Aramco.
“The relations between Saudi Arabia and Russia are going through one of their best moments ever,” Prince Mohammed told Putin. “We have a lot of common grounds. As far as our disagreements are concerned, we have a clear mechanism of how to overcome them. We are moving forward quickly and in a positive way,” he added. “The most important thing is that we are succeeding in building a solid foundation to stabilize oil markets and energy prices,” Prince Mohammed said.
Last December, Russia and 10 other non-OPEC nations agreed to join OPEC’s output cuts for the first time in 15 years. Last week Moscow agreed to extend its cooperation by another nine months until March 2018. Both Moscow and Riyadh said that cooperation would last beyond the current agreement as both countries are still trying to find ways how to co-exist with US shale oil producers, which have been responsible for creating the current oil glut and which are not part of the global output reduction deals.
“We are grateful to you for your ideas and the joint work between OPEC and the countries, which are not part of the cartel,” Putin told Prince Mohammed. “We support political contacts, contacts between defense ministries, we work together on sorting difficult situation, including in Syria,” Putin said. Prince Mohammed’s meeting with Putin comes shortly after US President Donald Trump visited Riyadh as part of his first overseas trip. Putin again reiterated an invitation for Saudi monarch King Salman to visit Russia and insisted it would be a “good sign and a good signal”. – Agencies