Saudi Arabia looks towards Russian Federation

Kristopher Drake
October 5, 2017

Prior to his departure from the coastal city of Jeddah, the Saudi Press Agency reported that Salman was accompanied by several ministers including Foreign Minister Adel al-Jubeir, Minister of Trade and Investment Majid Al-Qassabi and Minister of Energy Khalid al-Falih.

Saudi Arabian Oil Company (Saudi Aramco) is participating in the historic Royal Visit to Russian Federation by The Custodian of the Two Holy Mosques King Salman Bin Abdulaziz Al-Saud on October 4-7, 2017.

"Experts say this visit is bigger than a mere protocol event already now and it should bring practical results since we stand in need of a discussion of many problems".

Russian Federation and Saudi Arabia were key to the agreement in 2017 to cut production by around 1.8 million barrels per day for six months and subsequently extend it through March 2018.

The recession occurred mainly due to the oil sector, impacted by the product's low prices in the global market in the last three years.

Saudi Aramco is also expected to sign a number of Memoranda of Understandings with major Russian companies.

Russia, which sits on the world's second-largest gas reserves can help the kingdom meet its growing demand for electricity and Riyadh, which is set to take Aramco public next year in what is slated to be the largest listing of its kind, is a welcome investor in Moscow.

A thaw between Moscow and Riyadh helped reach November's deal in which OPEC and 10 other oil-producing countries, including Russian Federation, agreed to cut their production in a bid to combat a supply glut and shore up crude prices. RBC Capital Market's Helima Croft believed the deal could be extended to June; meanwhile, Macro-Advisory's Chris Weafer said the deal could be extended to run until fall 2018, saying that oil markets were not yet stable.

Miswin Mahesh, oil analyst at Energy Aspects, agreed that the oil giants could be more cautious in terms of announcing a further extension to the reduction in oil output.

The Kremlin said ahead of the visit that Salman and Putin will discuss "the situation in the Middle East and North Africa, especially focusing conflict situations in the region".

Other reports by Ligue1talk

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