Cooperation between Saudi Arabia and Russia has “breathed life back into OPEC” and made the country more optimistic about the outlook for oil than it has been for several years, Saudi Arabian Minister of Energy and Industry Khalid al-Falih said.
The success of the collaboration between the world’s two largest oil exporters is clear, al-Falih said.
The relationship, which involves coordinated production cuts to eliminate an oversupply and joint energy investments, brings both short and long-term gains, he said, after a meeting in Moscow with his Russian counterpart, Alexander Novak.
Al-Falih was speaking at the start of Saudi King Salman bin Abdulaziz Al Saud’s historic first visit to Russia to meet Russian President Vladimir Putin. The two nations — joint architects of the supply agreement between OPEC and other producers that has boosted prices — are looking at ways to extend and deepen their relationship.
Russia is achieving its goals in the accord with OPEC and the oil market is rebalancing step by step, Novak said.
Russia may agree to extend the oil-supply agreement until the end of next year, Putin said on Wednesday, although he would wait to make a decision nearer the expiry of the existing pact in March.
The arrangement that took effect in January benefits oil consumers as well as producers because it guarantees a “stable market,” he said.
The Saudi courtship of Russia reflects a convergence of interests between the nations, both of which want to spur a recovery in crude prices.
It is also a recognition by Riyadh of the changing political balance in the Middle East after Putin successfully countered indecisive US efforts to topple Syrian President Bashar al-Assad.
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