14.04.2024

Oil could undermine the alliance between Russia and Saudi Arabia

Saudi Arabia’s King Salman’s trip to Russia had a lot of pomp, but not only that: «Amid joyous greetings, guards of honor and banquets in the Kremlin, oil and defense deals were signed that could signal a new era of cooperation,» reports Robin Pagnamenta, correspondent for The Times.

«Sounds like a triumph for the Russian diplomatic service, which is happy to make a traditional US ally a Russian friend in the increasingly muscle-flexing Middle East. But can the Saudi-Russian romance really last?» — the author writes.

«The real test of the relationship may be the listing of Saudi Aramco, the Saudi state-owned oil producer, in 2018 or 2019. By then, the oil market could stabilize at higher levels than it is now, dampening the momentum for continued joint action,» Pagnamenta said. «Moreover, if the initial public offering is successful, Saudi Arabia’s desire to push oil prices upward in order to maximize the market value of securities before issuance may also weaken.»

“It is at this point that the old rivalry could return — including the struggle for market share between Russia and Saudi Arabia in the growing Asian oil market, — the article says. — Right now, both sides seem to be acting as if the current rapprochement will remain significant even after the above, but time will tell. «

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