The Daily Update - Landmark meeting between Russia and Saudi Arabia

In what is the first state visit to Russia by a Saudi ruler, King Salman bin Abdulaziz today will meet Vladimir Putin to discuss oil markets, investment deals, the Syrian war and to deepen the nascent friendship between the two largest oil producers in the world. The delegations are tabling $3bn worth of energy deals with the possibility of a collective $1bn energy investment fund and a $1bn Sibur plant in Saudi Arabia; there’s talk of Gazprom Neft and Saudi Aramco establishing joint research projects; and interminable rhetoric on the “promising areas for bilateral co-operation.”

Yesterday, as Russia cordially welcomed King Salman, Putin declared that “relations with Saudi Arabia […] are developing rapidly” and that they, “are looking ahead with confidence, both with Saudi Arabia and the Middle East in general.” This is indeed a major development for the region as the two energy goliaths address common economic challenges and attempt to dissolve the conflicts of interest surrounding Russia’s support of the Assad regime – which aligns more with Saudi’s nemesis Iran. Saudi will be seeking assurances that Iran will not have any permanent involvement in Syria post-ISIS.

Fostering friendship with Russia has become increasingly essential for Saudi given the increasing influence Russia has garnered across the Middle-East in recent years: not just through their involvement in the Syrian War but through a decade of actively building ties across the region. Also uncertainties/disappointment from the Trump administration, and perhaps some bitterness from US’s shale impact, have accelerated Saudi’s looking eastwards. But the Saudi-US long term friendship is unlikely to be abrogated; alliances with the west stretch back beyond President FDR and the Suez Canal.

The talks should be an economic and political win for both players, furthering Russia’s strength in the region and bolstering Saudi Prince Mohammed’s “Vision 2030” economic transformation programme. Oil markets will be looking for any signals related to the crude production cut deal struck last December and news of extending the oil pact between the Saudi-led OPEC cartel and Russia.

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