Saudi Arabia's Public Investment Fund (PIF) will invest $10 billion in the government-run investment fund Russia Direct Investment Fund (RDIF).
RDIF said it had signed a partnership agreement with another Saudi Arabian sovereign wealth fund, the Saudi Arabian General Investment Authority (SAGIA).
"The parties will identify attractive joint investment opportunities in the SA and the Middle East," it said.
The funds would be reportedly invested in infrastructure and agriculture, as well as healthcare, retail and real estate.
The investment comes following a recent visit by Saudi Crown Prince Mohammed bin Salman to Russia in unusually high-level visit from a country which has long been an ally and protectorate of the US.
Saudi Arabia’s warming comes 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.
US’s diminishing dependence on the Middle East oil due to its shale resources and its “pivot” to the East are cited among the reasons having prompted the Saudis to look for new friends.
Saudi Oil Minister Ali al-Naimi has said cooperation with Russia “will lead to creating a petroleum alliance between the two countries for the benefit of the international oil market”.
But many analysts believe the Saudi overtures are a tactical move in order to “get out of the narrow US corner and expand its options”. They believe the kingdom will never turn away from its long-time allies, most importantly the US.
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