"We should respond to anything that destabilizes the market," Putin said in an interview with Arab TV networks, according to a transcript on the Kremlin website. "We will certainly work with Saudi Arabia and with our other partners and friends in the Arab world in order to level out, to reduce to zero, attempts to destabilize the market." The remarks were made ahead of Putin's plans to visit Saudi Arabia on October 14 and the UAE on October 15.
"If someone thinks that actions, such as the seizure of tankers, attacks on oil infrastructure, will somehow affect cooperation between Russia and our Arab friends - Saudi Arabia, the United Arab Emirates - that it will somehow influence or destroy our cooperation on OPEC+, they are deeply mistaken," Putin said.
Russia, Saudi Arabia and the UAE are all part of the OPEC+ coalition which has restricted crude output since 2017 to stabilize global energy markets. The current deal is in place until the end of the 1st quarter of 2020.
Putin added that Russia condemns, but does not have reliable information about what happened when key Saudi oil infrastructure was attacked in mid-September, and who was behind the attacks. He said that at a recent meeting with Iranian President Rouhani, he was given assurances that Iran had nothing to do with it. Iran itself said on October 11 one of its tankers, the Sabiti, was rocked by explosions as it sailed in the Red Sea near the Saudi port of Jeddah.
Putin reiterated that while the attacks may have caused short-term price volatility, they did not achieve the aim of significantly disrupting the oil market, due to stable fundamentals.
In recent discussions with Saudi Crown Prince Mohammed bin Salman, Putin said a full investigation should be carried out, evidence obtained, and the attackers identified. He said that Russia is willing to participate in this process.
Putin does not, however, see a need for Russia to act as a mediator between Saudi Arabia and Iran. He said that interests of all countries in the region should be taken into account and respected.
There has been a major improvement in Russia's relationship with Saudi Arabia since the 2 countries succeeded in agreeing to the OPEC+ crude production cut agreement in 2016. Russia had traditionally held a closer political and economic relationship with Iran. Putin's visit on Monday will follow a state visit by Saudi King Salman bin Abdulaziz to Russia in 2017 and regular discussions with the crown prince.
"In Soviet times, relations between Saudi Arabia and the Soviet Union were at a rather low level. Over the last few years, the quality of our relations has changed dramatically. We see Saudi Arabia as a friendly state," Putin said. "I have a very good relationship with both the King and the crown prince. We are developing our relationship in almost all areas," he said.
He highlighted possible cooperation between Saudi Aramco and Russian petrochemicals giant Sibur on a project worth over $1 billion in Saudi Arabia.
Putin said that bilateral trade grew 15% last year and in the first half of 2019 was already up 38%. A joint Russian-Saudi investment fund has a budget of $10 billion, of which $2 billion has already been invested, he said.
Other potential areas of energy cooperation include LNG, oil and gas services and nuclear power capacity in Saudi Arabia. Putin added that he also considers the United Arab Emirates "to be one of our closest and most promising partners." He said that Russia's trade turnover with the UAE is the largest in the Gulf, at $1.7 billion.
"But this is, of course, not enough, we understand this and are working with the UAE's sovereign wealth fund. The overall platform is around $7 billion, $2 billion has already been granted to projects and we are actively looking for new projects," Putin said.
The 2 countries are both participants in the Gas Exporting Countries Forum, and Gazprom Neft, RDIF and Mubadala Petroleum are jointly developing oil fields in the Tomsk and Omsk regions of Siberia.
Putin is due to hold talks with Abu Dhabi Crown Prince Mohamed bin Zayed on October 15.
Author: Rosemary Griffin
