Saudi Arabia is building a stronger, more sustainable and comprehensive alliance with Russia in the oil market, while independent analyst Dmitry Demidov described Saudi Arabia as a hard partner, often looking for his own interest, but now it is looking for Russian cooperation. Russia has normal relations with all the major players in the Middle East.
- Russian Energy Minister, Alexander Novak met his new Saudi counterpart, Abdul Aziz bin Salman al-Saud.
Dmitry Demidov also said that it is possible that Saudi Arabia and Russia cooperate in the field of technology, noting that Saudi Arabia recognizes that it does not want to re-create the oil market on its own, which made it looking for partners, noting that the meeting of Russian Energy Minister Alexander Novak with his counterpart Saudi Arabia’s new energy minister, Prince Abdul-Aziz bin Salman Al-Saud, has focused not only on oil prices, but also on preparations for a meeting between President Putin and Saudi Arabia’s leadership on Saudi Aramco’s IPO.
Implementation of the OPEC+ Agreement
For example, you can look at Rosneft’s customers in 2005, as they were not hindered when they worked in Russia until 2013. While this issue will be resolved at the level of senior officials who are the ministers preparing for the meeting, but it will not be included on the agenda. The main issue for the next year’s IPO is who Riyadh will grant the big packages.
Of course, banks can simply buy it, but the deal is now between oil companies, which are struggling for future contracts and participating in the development of oil fields. While Riyadh will try to raise oil prices tactically, because it would be good to raise the company’s rating before the sale, and then prices will remain at the current level.
Oil prices fit everyone, but the situation will change when US shale workers extract all commercially interesting reserves. Reaching $60 a barrel would be enough to stagnate prices and extract these reserves within two years, as well as to remove additional quantities from the market. Demidov also predicted that in this case prices will rise, which will allow economic development of reserves adjacent to the coasts that are difficult to extract.
However, according to the Saudi energy minister, Riyadh and Moscow now intend to establish and maintain strong relations, the main aim of which is to have a stronger, more stable and more inclusive alliance. Earlier, the Wall Street Journal reported that Riyadh, the Gulf states, and 10 Russian-led countries intend to amend the agreement.
It is still difficult to talk about the shape of the alliance. The Saudis are currently looking for Russian cooperation, while Moscow having normal relations with all the major players in the Middle East.
Russia may provide Saudi Arabia with some geopolitical guarantees and the technology cooperation is possible. Both sides have now realized that friendship is better than fighting.
Recent US actions have not been of concern to Riyadh, where there is a cooperation between British and American companies, which have always been developing fields and extracting oil, the situation will gradually be reversed when other countries enter Iraq and Saudi Arabia.
Demidov also notes that western companies have not launched new projects in this region. While the market is being reformatted, Riyadh does not want to do it alone, so it is necessary to look for partners and Russia’s participation will be a step forward. Based on the changes, the formation of the Russian oil industry will also be clear, because good Arab reserves will outweigh all of the depleted reserves in Russia.
Earlier, it was expected that OPEC would either over time become a new organization, or restructure the OPEC agreement, especially that the history of the oil market is being codified. On the other hand, OPEC was created in other circumstances more than 60 years ago, where the situation of the market has changed significantly.