Saudi says oil deal with Russian Federation helping market, demand healthy

Geneva Matthews
October 7, 2017

Russian President Vladimir Putin admitted that he once met United States President Donald Trump, but said he has no personal ties with him.

Putin has said that Moscow is aware of Iran's and Saudi Arabia's concerns over the settlement in Syria and is determined to seek compromise.

Saudi Arabia is planning to invest in more than 25 agriculture, oil and gas projects in Russia, the Russian Industry and Trade Ministry's press service said in a statement.

"All sides must ease rhetoric and find ways for face-to-face dialogue between the United States and North Korea, as well as between North Korea and countries in the region", Putin said.

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.

Even news that mitigates that crude gain casts OPEC in an unfavourable light inasmuch as it reinforces the notion that the cartel's current effect on the market overall is negligible: Libya's oil production slumped to a five-month low, to 750,000 bpd from 985,000 bpd, after an armed group forced workers at the Sharara field to stop pumping.

Writing in The Moscow Times, Yuri Barmin, an expert at the Russian International Affairs Council with a focus on Russia's presence in the Middle East, says that while both countries have far-reaching economic and strategic goals for the visit, it could "become a trust-building measure removing another variable from the Middle Eastern geopolitical equation". "But as I think of fundamentals I am more optimistic than I have been in the last two or three years, demand is healthy around the world in developed and developing countries", said the minister.

Saudi Arabia is now investing over $1 billion in over 20 Russian projects including the construction of a petrochemical complex and Pulkovo Airport in St Petersburg, Russian Energy Minister and co-chairman of the Russian-Saudi Intergovernmental Commission Alexander Novak said. Amin Nasser, CEO of Saudi oil giant Aramco, will be there.

The visit comes a month before members of the OPEC oil cartel, of which Saudi Arabia is the biggest producer, are due to meet with the other nations that have joined them in cutting crude output, including Russian Federation, to discuss extending the pact that has helped prop up prices. Saudi Arabia is one of the biggest spenders in the world.

"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 global benchmark was down 0.4% at $55.78 at 12.31pm in London.

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