Saudi Arabia agrees to buy Russian S-400 air defense system

Kristopher Drake
October 6, 2017

Saudi Energy Minister Khalid al-Falih was speaking in a television interview a day after Russian President Vladimir Putin said the supply reduction deal that is due to expire in March could run to the end of next year.

Any sign that the deal could unravel could see oil and gas prices fall back down, pinching the finances once again for countries like Saudi Arabia and Russian Federation. According to representatives of the Kremlin, issues of defense cooperation between Russian Federation and Saudi Arabia are going to be discussed as well.

The Aramco IPO, which could raise $100 billion, is a centrepiece of Vision 2030, an ambitious reform plan to diversify the Saudi economy beyond oil which is being championed by Saudi Crown Prince Mohammad bin Salman.

And a deal has also been reached for Russian Federation to supply Saudi with S-400 anti-aircraft missiles. This leaves Moscow aligned with Saudi Arabia's arch-rival Iran, whose influence Riyadh fears is growing in the region.

On Thursday, Putin received the monarch in the gold-decorated St. Andrew Hall, one of the grandest spaces in the Kremlin, attended by soldiers in ceremonial dress and with an orchestra playing their countries' national anthems.

The leaders of the world's largest energy exporters discussed an extension of an Opec agreement to cap oil output and oversaw the signing of deals which officials said were worth billions of dollars.

King Salman's visit to Russian Federation has been widely interpreted as a sign of Russia's growing influence in the Middle East.

The Saudi monarch's decision to visit Russian Federation, now of all times, marks a new shift in Riyadh's foreign policy, Vyacheslav Smirnov, director of the Scientific and Research Institute for Political Sociology, told Radio Sputnik.

US State Department spokesperson Heather Nauert was asked during a recent briefing whether the United States was concerned about the recent moves of its staunch allies - Turkey and Saudi Arabia.

State oil giant Saudi Aramco will sign several non-binding MoUs on Thursday with Russian companies Gazprom (GAZP.MM), Gazprom Neft (SIBN.MM), Sibur and Litasco. Both are US allies, strong USA allies. "I don't see our relationships with any of the major countries changing", Nauert responded.

Saudi Arabia and Russian Federation are heavily dependent on oil exports and the plunge of the price of crude that began in 2014 lashed both of their economies.

"Whether we will extend these agreements or not will depend on the situation in the world market", he said.

Expanding on this, Ahmad continued: "In the past, Saudi Arabia has expressed a commitment to increased production cuts to bolster the market".

Other reports by Ligue1talk

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