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About-Face! Saudi Arabia and Russia Ink Six New Deals, Embark on New 'Petroleum Alliance'

Under the leadership of a new king, Saudi Arabia is reversing course on its Russia policy from 2014

In Riyadh, there's a new king in town, and he is a very different man than his brother before him. After shaking up the government and replacing the chief executives of Saudi Arabia's two biggest corporate behemoths (SABIC & Saudi Aramco), his new majesty seems to have the right people in place to carry out what appears to be an entirely new set of policies.

Case in point was this past Thursday's meeting in St. Petersburg where President Putin received the Deputy Crown Prince and Saudi Defense Minister Muhammad bin Salman (a son of the current King Salman), along with Foreign Minister Adel al-Jubeir and the all-powerful Oil Minister Ali al-Naimi. The two sides signed a total of six new cooperation agreements that included the nuclear and military spheres.  

The delegations also took the opportunity to address ways to improve bilateral relations, particularly in the fields of technical cooperation, housing, oil and gas, and investment opportunities.

From the Saudi delegation, the real power in the room was of course the vaunted Oil Minister Ali al-Naimi, who sounded quite confident about a rise in the price of oil in the near future. Naimi was quoted as saying, "I am optimistic about the future of the market in the coming months in terms of the continuing improvement and increasing global demand for oil as well as the low level of commercial inventories." This, the minister said, "is expected to improve the level of prices." 

Naimi went on to praise the enhanced bilateral cooperation between Riyadh and Moscow, stating that, "This, in turn, will lead to creating a petroleum alliance between the two countries for the benefit of the international oil market as well as producing countries and stabilizing and improving the market."

A 'petroleum alliance' between Saudi Arabia and Russia to stabilize the global oil market? It sounds unlikely, particularly with all the talk about the U.S. and Saudi Arabia secretly agreeing to collapse Russia's economy by crashing the price of oil in 2014, not to mention how the two countries diametrically oppose one another on issues such as Syria, Iran, and Yemen.

But again, Saudi Arabia is under new leadership and is not the same country it was a year ago. The delegation sent to Russia this past week was of the absolute highest level, and the fact that the statement was given directly by Mr. Naimi, as opposed to some all-too-common 'senior official' or 'unnamed source', speaks volumes.

Naimi --- the redoubtable 80-year-old boss of Arabian black gold --- is a living legend in the Kingdom (he started his career with Saudi Aramco at the age of 11), and wields more power there than anyone who isn't the king. Statements from him on Saudi energy policy are not thoughts or opinions. Rather, they are facts and policies; and they would never be stated without the explicit approval and authority of the king.

Put simply, Mr. Naimi just declared a new direction in Saudi Arabian foreign policy.     

This is just the beginning of a new chapter in Saudi-Russian relations. During his meeting with President Putin, Prince Muhammad publicy announced that his father had offically invited the Russian president to the Kingdom, stating, “I have the honor to pass on an invitation to visit the Kingdom of Saudi Arabia, as we regard Russia as one of the important states in the contemporary world, and our relations have roots in the past.

Mr. Putin accepted the king's invitation to visit the Gulf state and in turn announced that he had invited the king to Moscow, which the deputy crown prince confirmed had been accepted. These meetings --- if and when they take place --- will be events to be followed very closely.

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