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Russia and Saudi Arabia Pursue OPEC Deal at World Cup Meeting

Crown Prince was invited by Russian President Vladimir Putin to attend the opening ceremony of the 21st World Cup

Image Credit: Reuters
Russian President Vladimir Putin shakes hands with Saudi Arabia’s Deputy Crown Prince and Defence Minister, Mohammad Bin Salman during a meeting at the Kremlin in Moscow, Russia.

Dubai – Crown Prince Mohammad Bin Salman of Saudi Arabia has left to Russia this morning according to a statement from the Saudi Royal Court.

According to the statement Crown Prince was invited by Russian President Vladimir Putin to attend the opening ceremony of the 21st World Cup and to watch the match between the Saudi team and Russia.

On social Media a video have been circulating showing a billboard with Saudi Crown Prince Mohammad Bin Salman picture on the streets of Moscow, a day before his visit.

During his visit Mohammad Bin Salman will be meeting with President Vladimir Putin to discuss an oil deal according to the Kremlin spokesman Dmitry Peskov, who spoke to reporters on Wednesday.

Come for the football, stay for the oil diplomacy

Russian President Vladimir Putin and and Saudi Crown Prince Mohammad Bin Salman will discuss how to boost oil production while maintaining their petro-alliance when they meet in Moscow to watch the soccer World Cup's opening match between the two countries.

The world's largest oil exporters are negotiating how to rework their unprecedented, and successful, deal to control oil production as U.S. sanctions on Iran and the collapse of the Venezuelan petroleum industry threaten to send crude skyrocketing.

"This is the most political OPEC meeting in a long time," said Amrita Sen, chief oil analyst at consultant Energy Aspects Ltd.

Both Saudi Arabia and Russia have proposed plans for the  OPEC+ group that would add as much as 1 million barrels a day, about 1 percent of global output, although Riyadh prefers a smaller increase. The back and forth signals major differences remain, even between Riyadh and Moscow, who've worked very closely over the past two years.

Reaching an understanding between Russia and Saudi Arabia may prove easier than obtaining a wider agreement among the 24 countries bound by the agreement first struck in late 2016.

The Organization of Petroleum Exporting Countries meets in Vienna on June 22 and Iran, Venezuela and Iraq have publicly set themselves against a production increase.

"An output increase by the four main producers (Kuwait, Russia, Saudi Arabia, and UAE) looks inevitable," Ed Morse, head of commodities research at Citigroup Inc. in New York, said in a note to clients. But he warned that less than ten days for the meeting the size and timing of any increases was still up in the air.

Russia and Saudi Arabia forged their alliance in 2016 after face-to-face meetings between Putin and Mohammed Bin Salman. The diplomatic opening paved the way for Moscow joining OPEC in cutting production for the first time in more than a decade, with 24 countries agreeing to curb output by 1.8 million barrels a day in order to eliminate a supply glut that was weighing on prices.

Since then, prices have rallied close to $80 a barrel. Saudi Oil Minister Khalid Al Falih and his Russian counterpart Alexander Novak, who will also attend today's match, have struck up a close working relationship, speaking regularly by phone and making several joint media appearances.

 

 

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