MOSCOW (Reuters) – Saudi Arabia and Russia, the world’s largest oil exporters, on Thursday called on all OPEC+ members to join an agreement on production cuts for the benefit of the global economy, just days after a difficult meeting of producers. ‘Club.
Hours after Russian President Vladimir Putin headed to Riyadh on a hastily arranged visit to meet with Saudi Crown Prince Mohammed bin Salman, the Kremlin issued a joint Russian-Saudi statement concluding their discussions.
The Organization of the Petroleum Exporting Countries (OPEC), Russia and other allies agreed last week to new voluntary cuts of about 2.2 million barrels per day, led by Saudi Arabia and Russia to extend their voluntary cuts of 1.3 million barrels per day.
The statement issued by the Kremlin said: “In the field of energy, the two sides praised the close cooperation between them and the successful efforts made by OPEC+ countries in enhancing the stability of global oil markets.”
They stressed the importance of continuing this cooperation, and the need for all participating countries to join the OPEC+ agreement, in a way that serves the interests of producers and consumers and supports the growth of the global economy. Added in Russian.
The Russian version used the word “accession” while the English translation of the statement, also issued by the Kremlin, used the word “commitment” to the OPEC+ agreement.
The official Saudi Press Agency said that the Crown Prince and Putin stressed in their meeting the need for OPEC+ members to adhere to the group’s agreement.
Sources in the oil market said that such a frank public statement from the Kremlin and the Kingdom about “joining” the cuts appears to be an attempt to send a message to members of the OPEC+ club who did not reduce production or did not reduce it enough.
The largest OPEC member excluded from the cuts is Iran, whose economy has been subject to various US sanctions since 1979 after the seizure of the US embassy in Tehran.
Iran is enhancing its production and hopes to reach production of 3.6 million barrels per day by March 20 of next year.
After returning to Moscow from Saudi Arabia, Putin on Thursday held talks with Iranian President Ebrahim Raisi in the Kremlin, along with Russian Deputy Prime Minister Alexander Novak and Defense Minister Sergei Shoigu.
Putin in Riyadh
Mystery still surrounds Putin’s trip to Riyadh and Abu Dhabi, in which four Russian fighter planes accompanied him, and it was not immediately clear what specific issue was so important for Putin to undertake a rare foreign trip.
The Kremlin said Putin and Mohammed bin Salman also discussed the conflicts in Gaza, Ukraine, Yemen, Iran’s nuclear program and deepening defense cooperation.
Mohammed bin Salman, 38, has sought to reassert Saudi Arabia as a regional power with less respect for the United States. Saudi Arabia is the largest buyer of American weapons.
Putin, who sent troops into Ukraine in February 2022, says Russia is engaged in an existential battle with the West and has courted allies across the Middle East, Africa, Latin America and Asia amid Western attempts to isolate Moscow.
The joint statement said: “With regard to the crisis in Ukraine, the Russian side expressed its appreciation for the humanitarian and political efforts made by His Royal Highness Mohammed bin Salman.”
OPEC+ disagreement?
The OPEC+ producer group, whose members pump more than 40% of the world’s oil, was forced to postpone its meeting due to disagreements with African producers over production, although some traders said they suspected a deeper division within the group.
After producers decided to cut supply, oil prices fell to their lowest level in five months – a clear sign that the market was expecting more explicit action from OPEC+.
Putin and Mohammed bin Salman, who together control a fifth of the oil pumped daily, appeared smiling and exchanging handshakes as Putin got out of his car in the Saudi capital.
Both Mohammed bin Salman and Putin (71 years old) want and need high prices for oil, which is the lifeblood of their economy. The question for both is how much of the burden each should bear to keep prices high, and how to check the burden.
In talks with Mohammed bin Salman, Putin said that the prince’s scheduled visit to Russia had been changed at the last minute, prompting him to visit Riyadh.
Putin said to Mohammed bin Salman, smiling: “We waited for you in Moscow.”
“I know that events forced the correction of those plans, but as I said before, nothing can prevent the development of our friendly relations.”
Then Putin said: “But the next meeting should be in Moscow.”
The Crown Prince said through a Russian translator that he was ready to do so.
“Then we agreed,” Putin said.
(Reporting by Reuters Editing by Alexander Smith, Mark Potter and David Goodman)
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