Saudi-Russian rapprochement fuels speculation of possible oil alliance
Putin toasts to more collaboration with Saudi Arabia, as the latter seeks to wean itself away from dependence on the US. (Brookings)
A recent visit by an emissary of the Saudi king to Russia has sparked a torrent of speculation, with some observers seeing it as the first sign of an emerging partnership between the two greatest global oil producers.
Some experts are inclined to read much into the unusually high-level delegation from a country which has long been an ally and protectorate of the US.
The visit came at a time when relations between Russia and the West, including the United States, are at the lowest ebb in recent years.
The Saudi deputy crown prince, whose country is the biggest OPEC oil producer, traveled to attend St. Petersburg Economic Forum sponsored by a country which is a non-OPEC member and a potential rival.
“That could mean that, at the very least, Russia would have a voice in the cartel’s policy decisions on production. And if so, it would be a voice on the side of stable but rising prices,” the popular energy news website Oilprice.com wrote.
Many reasons are being cited for the Saudis and the Russians for coming closer together, most importantly US’s diminishing dependence on the Middle East oil due to its gushing shale resources.
Washington’s “pivot” to East is also being seen as an overriding concern for the Saudis to search for new friends.
According to Pepe Escobar, writing in the Asia Times, the Saudi prince’s visit provides the first glimmer of light in the global oil war tunnel where the Saudis might turn down the spigot and lower production.
Saudi Oil Minister Ali al-Naimi said cooperation with Russia “will lead to creating a petroleum alliance between the two countries for the benefit of the international oil market”.
The Saudis and Russians signed several memoranda of understanding, including for setting up working groups to study possible energy joint ventures in Russia.
But skeptics are advising caution. They say it is hard to imagine Saudi Arabia turning against its long-time allies; they see the visit as part of the kingdom’s maneuvering to “get out of the narrow US corner and expand its options”.
Moscow and Riyadh have many differences on a range of issues, including Iran, Syria and Yemen. Iran is being cited as one of the reasons behind the Saudis’ decision to flood the markets with oil and crash prices.
It is simply impossible for Riyadh to walk away from the "capital" of alliance with Washington and replace it with Moscow but how much the Saudis would be willing to spend that capital, time will tell.
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