Oil steady as talk of new OPEC deal balances US exports

Trevor Jackson
October 6, 2017

Saudi Arabia's King Salman walks past Russian honor guards during a welcoming ceremony upon his arrival at Vnukovo airport outside Moscow, Russia October 4, 2017.

"We warmly welcome King Salman and we hope that his visit would contribute to strengthening economic, political, cultural and religious relations between our countries", he stated.

While Russia and Saudi Arabia are partners on the oil market, they are at loggerheads on Syria, where Moscow supports President Bashar al-Assad and Riyadh backs the opposition.

Over the past few years, Saudi Arabia has evinced interest in a wide range of Russian military hardware, such as T-90 tanks, infantry combat vehicles, air defense systems, tactical missile systems, and combat helicopters.

Mr Putin said on Thursday the Kremlin was open to extending a deal to cap production to the end of 2018.

Both sides are involved in the conflict, but on opposing sides.

Russian Federation and Saudi Arabia have often competed for energy market dominance. The recovery in oil markets has helped other commodities, he added.

As part of the agreement signed in Moscow today, Russian Federation will transfer technology and localize the manufacturing and sustainment of these armament systems in the Kingdom, a press statement from the Saudi Arabian Military Industries (SAMI) said.

King Salman of Saudi Arabia, OPEC's biggest producer, is due to meet Putin on Thursday.

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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.

A joint Saudi-Russian investment fund was launched worth $1 billion.

The Russian Direct Investment Fund on Thursday will also sign an MoU with Aramco and Saudi's Public Investment Fund for investments in energy services and manufacturing.

"Moscow has been entertaining the idea of selling its weapons to Saudi Arabia but it seems that Riyadh is not ready to go that far", Barmin told CNNMoney.

The current talks in Moscow will determine the fate of the package of arms contracts, including the delivery of S-400 Triumf anti-aircraft missile systems to Riyadh.

The leaders of the world's largest energy exporters also discussed the Opec agreement to cap oil output.

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

The Kremlin said ahead of the visit that Salman and Putin would also discuss the Middle East, "especially focusing on conflict situations in the region".

Other reports by TheDailyFarc

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