Putin’s Sword Dance with the Arab Prince
Russia and Saudi Arabia, through their OPEC allies, have asked all OPEC+ members to join the oil production reduction program on December 6th. Vladimir Putin, the President of Russia, made a quick trip to the United Arab Emirates but not to attend the United Nations Climate Conference in Dubai, and then to Saudi Arabia.
Putin met with Mohammed bin Zayed Al Nahyan, the Crown Prince of the United Arab Emirates and the ruler of Abu Dhabi, in Abu Dhabi, the capital of the UAE. He then went to Riyadh and met with Mohammed bin Salman, the Crown Prince of Saudi Arabia, for the first time since October 2019. According to the French news agency TASS, they discussed cooperation in the oil industry and international affairs, particularly the Gaza conflict between Israel and Hamas.
Saudi Arabia and Russia, the world’s two largest oil exporters, asked all OPEC+ members to agree to production cuts for the benefit of the global economy, just a few days after the tumultuous meeting of the producers’ club.
Shortly after Vladimir Putin, the President of Russia, went to Riyadh to meet with Mohammed bin Salman, the Crown Prince of Saudi Arabia, the Kremlin released a joint statement by Russia and Saudi Arabia announcing the end of talks between the two sides.
Last week, the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies agreed to voluntarily cut approximately 22 million barrels of oil per day, led by Saudi Arabia and Russia. The statement from the Kremlin mentioned that they went beyond their voluntary cuts by reducing 13 million barrels per day. They expressed appreciation for the close cooperation between the two sides in the energy sector and the successful efforts of OPEC Plus countries in strengthening the stability of global oil markets.
The statement emphasizes the importance of continuing these collaborations and the need for all participating countries to join the OPEC Plus agreement in a way that ensures the interests of producers and consumers and supports global economic growth. The Russian version of the statement uses the word ‘joining,’ while the English translation of the statement, also released by the Kremlin, uses the phrase ‘joining the OPEC Plus agreement.’
The Saudi Arabian state news agency, SPA, announced that the Crown Prince and Putin emphasized the importance of OPEC Plus members adhering to the group’s agreement on market oil resources. Sources in the oil market said that this public and explicit statement by the Kremlin and the Saudi Kingdom regarding joining the oil production cut seems to be an attempt to send a message to those expensive members of the OPEC Plus club who have not provided sufficient or any reduction in their oil production.
Iran, which has been excluded from the production cut as the largest OPEC member, has been under the influence of various US sanctions since 1979 after the occupation of the US Embassy in Tehran. Iran is increasing its production and hopes to reach a production of 36 million barrels per day by March 20th of next year.
After returning from Saudi Arabia to Moscow, Putin met and held talks with Ibrahim Raisi, the President of Iran, Alexander Novak, the Deputy Prime Minister of Russia, and Sergei Shoigu, the Defense Minister, in the Kremlin on Friday.
Putin in Riyadh
The purpose and intention of Putin’s trip to Riyadh and Abu Dhabi, where four Russian fighter jets escorted him, is still shrouded in ambiguity. It is not yet clear whether the main objective of this trip was to discuss oil and international political relations, or if there was another specific and important issue that prompted Putin to make this rare trip abroad.
The Kremlin announced that Putin and Mohammed bin Salman discussed the conflicts in Gaza, Ukraine, and Yemen, as well as Iran’s nuclear program and deepening defense cooperation. It seems that Crown Prince Mohammed bin Salman has tried to present Saudi Arabia as a regional power that operates independently from the United States. Saudi Arabia is the largest buyer of weapons from the United States.
Putin, who deployed his forces to Ukraine in February 2022 and militarily attacked the country, says that Russia is engaged in an existential battle with the West. The West has invited its allies throughout the Middle East, Africa, Latin America, and Asia to participate in its efforts to isolate Moscow. The joint statement states that Russia appreciates the humanistic and political efforts of His Excellency Mohammed bin Salman in relation to the Ukraine crisis.
Differences in OPEC Plus
The OPEC Plus production group, which accounts for over 40% of the world’s oil production, had to postpone their meeting due to disagreements with African producers about reducing production. Some sources believe that this disagreement and rift go beyond just reducing production levels. After the producers’ decision to lower oil prices to their lowest level in the past five months, it became evident that the market expected a more explicit action from OPEC Plus.
Putin and Mohammed bin Salman, who together control one-fifth of the daily pumped oil, warmly and intensely shook each other’s hands at the moment of their meeting, attracting the attention of news agencies.
Both Mohammed bin Salman and Putin are in favor of and need high oil prices, which are essentially the lifeline and backbone of their economies. The question for both parties is how much responsibility each should take to maintain high prices and how they can achieve this.
During a conversation with Mohammed bin Salman, Putin said that the planned trip of the prince to Russia had changed at the last minute and he had been forced to visit Riyadh. Putin smiled and told the Saudi Crown Prince, ‘We were waiting for you in Moscow. I understand that unexpected events led to the change in plans, but as I have said before, nothing can hinder the development of our friendly relations.’
Putin then added, ‘But the next meeting should be in Moscow.’ The Crown Prince, through a Russian translator, said that he was ready to travel to Moscow at the earliest opportunity. In response, Putin said, ‘So we have reached an agreement. It is possible that this trip is a response to the sanctions imposed on Russia and Putin, along with the sanctions imposed on Ukraine. Since July 2022, when he traveled to Iran to meet with the President of the Islamic Republic, Ali Khamenei, Putin has not made any trips to any Middle Eastern countries.’
On Friday, the Russian Parliament determined the date for the next presidential elections to be held on March 17, 2024. Putin has not yet stated whether he will run again, but it is expected that he will announce it in the coming days and win the elections. Thanks to constitutional amendments made to his liking, he can also run for two more six-year terms after his current presidential term ends next year. Given the suppression of opponents and the control of Putin’s power-hungry party over the Russian political system, it is unlikely that the elections will have any other outcome.
