Moscow — Riyadh: 2017

Russia and Saudi Arabia want to bring the dialogue to a higher level, despite the strong and reliable relations between the two countries, said the Advisor to the Royal Court of Saudi Arabia, the General Director of the Center for Humanitarian Assistance on behalf of the King Salman Abdullah al-Rabiah at a press conference in Moscow...

...And there is good confirmation of it. From April 15 to 17, 2017 the Federation Council speaker Valentina Matvienko went to Saudi Arabia with the official visit. Matvienko had met with the leadership of the country, the Chairman and Members of the Advisory Council of the Kingdom. 

The main themes of negotiations were the peaceful settlement of Middle East conflicts, as well as issues of military-technical coope­ration and interaction in energy sphere and agriculture. 

According to Valentina Matvienko, the Russian Direct Investment Fund (RDIF) and the Public Investment Fund of Saudi Arabia will launch joint projects for the total sum of 3 bil­lion USD until the end of 2017: “the Funds have been successfully integrated. Because of them the projects worth about $600 million  have already been fully implemented.” The speaker assured that for its part the Federation Council will promote the removal of barriers for development of business contacts between the two countries. 

Let us recall that the partnership of the Russian Direct Investment Fund and the Public Investment Fund (PIF) for joint investment activities into the most attractive projects in Russia started in 2015. In addition, the RDIF signed an agreement with another public Fund of the Kingdom and the Saudi Arabian General Authority (SAGIA)

Valentina Ivanovna has also released a good news about the visit of the King of Saudi Arabia to Russia after being invited personally by the President Vladimir Putin. “Earlier, the President of the Russian Federation invited the King to pay an official visit to Russia. He said that he accepted the invitation with gratitude and plans to visit the Russian Federation... The King immediately gave all necessary instructions to his government officials to start preparing the content for the visit,” — RIA Novosti Agency quotes Matvienko. Let’s remember that in February of this year the President of Tatarstan Rustam Minnikhanov had a meeting with the Saudi King. He conveyed the warmest wishes from Vladimir Putin, as well as an invitation to visit Russia and Tatarstan Republic again.

But before that, in May 30, 2017, the Saudi Crown Prince, Mohammad bin Salman has also paid a visit to Moscow. What was it about? Likely, about the main issue. As was noted by Mohammad bin Salman at the meeting with Vladimir Putin, “we have no disagreements in relation to the Russia’s policy and the politics of Saudi Arabia... There are so many points of understanding between the two countries. As for those points on which we disagree, there is a clear mechanism to overcome them. We are moving with positive momentum and in a po­sitive way.” — And he also added: — “at present, relations between Saudi Arabia and Russia are experiencing one of the best stages.” 

“I am very confident that the first visit of the King of Saudi Arabia to Russia in history of our relations shall be a good sign, a good signal and good stimulus for further development of our interstate relations,” — said Vladimir Putin.

The specific points of the talks have been the price of oil, on which depends the world prosperity and markets, the issue of Middle East, and the Russian economy. Concerted actions of Russia and Saudi Arabia allow for stabilization of the situation on the world markets, noted the President of Russia in the course of the meeting.

Let’s recall that, just before the Prince’s visit to Moscow, OPEC and a number of other countries (including Russia) agreed to extend the agreement from January 1, 2017 on the oil production cuts until the end of the first quarter of 2018. As was noted by the Western experts, Riyadh helped Moscow to carry out the idea on the reduction of quotas, and the world’s media called this cooperation — the Oil Alliance. During the visit, the parties attempted to expand that Alliance. 

According to the Minister of Energy of Russia, Alexander Novak, the oil cooperation between the two countries can move on to a new level. “There are new prospects for bilateral cooperation, implementation of joint projects on extraction, transportation and processing of hydrocarbons on the territory of participating States and other countries, and technological cooperation,” — said the Minister. 

According to analysts of JP Morgan, the price of oil can rise above the level of $60 per barrel, if the validity of the Treaty of Vienna of the OPEC countries and other States on the reduction of oil production will be extended until the end of 2017. Compared to October 2016, oil production in the OPEC countries participating in the agreements on the reduction of oil production, declined by 1.13 million barrels per day. Thus, the cartel fulfilled the obligation by 97% (it has been 95% in the previous month). On average, the commitment of OPEC to this agreement during the five months of its validity is 96% 

“The growth of oil production in Libya and Nigeria, which are exempt from commitments to reduce production, had led to the increase in total oil production by OPEC in May to 290 thousand barrels per day, up from 32.08 million barrels per day — its highest level this year,” — as is stated in the expert report. But in annual terms, the mining of the alliance countries decreased by 65 thousand barrels per day.

On June 10, in Astana the Minister of Energy of the Russian Federation Alexander Novak held a meeting with his counterparts from Saudi Arabia and Kazakhstan, Khaled al-Va­lich and Kanat Bozumbayev, where the sides discussed the current situation. The Heads of the respective energy agencies confirmed their commitment to the agreement executed by OPEC and other States on the reduction of oil production (OPEC+).

In a broader format, the Ministers of the Gulf countries, including Qatar and Saudi Arabia, responsible for oil and basic industry, agreed to meet again in July 10 – 13 at Innoprom in Ekaterinburg. In the program published on the website of Innoprom, and namely in the list of participants for the first meeting in the format of “Russia — The Cooperation Council of the Arab States of the Persian Gulf” were also present the head of Minpromtorg Denis Manturov, Minister of Energy and industry of Qatar Mohammed bin Saleh Al-Sada, Minister of industry, trade and tourism of Bahrain Zayed Rashed al Zayani, Minister of Commerce and industry of Kuwait Khaled Nasser Abdullah Ar-Roudan, Minister of economy of the UAE Sultan Saeed al Mansouri, Minister of Commerce and industry of Oman, Ali bin Masoud al-Sunaidi, Minister of trade and investment of Saudi Arabia Majed bin Abdullah al-Kassabi, the Secretary General of the GCC Abdel al-Zayani.

On June 13, the President of the Russian Federation Vladimir Putin held a telephone conference with the King of Saudi Arabia, Salman bin Abdulaziz Al Saud. The heads of States exchanged views on the current situation in the Middle East and North Africa. The sides discussed topical issues of Russian-Saudi relations in various fields, leaders voiced their determination to intensify bilateral cooperation and the parties agreed to continue contacts on various levels.

Prospects for the straightening of Russian-Saudi economic cooperation are very broad, including in the economic sphere. Here is an extract from the latest news — there is an intention of the Sovereign Public Investment Fund of Saudi Arabia to enter into the development project of Tushino airfield in north-west of Moscow.