The head of Russia’s state-run oil giant Rosneft PJSC, Igor Sechin, said last month that there’ll be pressure for OPEC and its partners to extend production cuts if Saudi Arabia proceeds with an initial public offering of a stake in Saudi Aramco. About 5 percent of the Saudi state oil producer will be offered in an IPO next year that could value the company at more than$ 1 trillion, depending on the oil market.
” The Saudis will be looking for a solid commitment from President Putin to stick with the production deal with OPEC ,” said Chris Weafer, a partner at Macro Advisory in Moscow.” That is Riyadh’s best hope for maintaining the price of Brent in the mid $50′ s, if not get it above $60 in time to support the kingdom’s ambitious valuation target for Aramco .”
The unlikely partnership between Moscow and Riyadh marks a sharp turn-around from Soviet days. Saudi Arabia cut off relations with the atheist Communist state in 1938, only restoring them after the Soviet collapse. Together with the CIA, the Saudis also armed mujahedeen fighters who aimed the Soviet Red Army’s 10 -year occupation of Afghanistan.
Still, tensions remain over Syria, where Saudi Arabia is pressing Russia to rein in Iran, which the kingdom regards as its chief challenger in the region, following the defeat of rebels backed by Riyadh in the war against Assad.
At his talks with Putin, King Salman demanded that Iran stop interfering in the internal affairs of other Middle East nations and destabilizing the region, calling for a political settlement in Syria.
The Saudi king” won’t demand the impossible ,” said Irina Suponina, a Middle East expert at the Russian Institute of Strategic Study, which advises the Kremlin.” Saudi Arabia is aiming for real cooperation with Russia and understands that you can’t split Russia from Iran ,” she said.