Marking his first state visit to Russia, King Salman landed with a retinue of 200 delegates making it the largest ever foreign delegation to visit Moscow. Welcoming him at the Kremlin, President Putin said, “This is the first visit by a Saudi Arabian monarch in the history of our relations and that in itself is a landmark event. I’m sure your visit will boost the ties between our countries.”
Heralding in a new upbeat phase in Saudi-Russian bilateral relations, this event highlights a shift in the balance of power towards Russia. Particularly when the last and only official state visit to Saudi Arabia was in 2007 by President Putin, the new equation will swing global oil rates as well as the prevalent state of affairs in the Middle East.
Having been hit by falling oil prices in the past few years, Russia and Saudi Arabia find converging interests on energy policies despite a divergence on regional issues. Proactively though, Saudi Arabia is adopting a brand new foreign policy under the influence of Crown Prince Salman. Gradually modernizing his country under ‘Vision 2030’ reforms, the young Prince is innovative and gradually shedding traditional norms practiced in Saudi Arabia. Having arranged King Salman’s state visit while on his recent visit to Russia in May 2017, he observed that, “the relationship between Saudi Arabia and Russia is going through one of the best moments.”
Overlooking the usual concerns regarding the similar export markets of Russia and Saudi Arabia  that render an increase in bilateral trade volume an uphill task, he focused on positive aspects instead. Initially, it was an agreement on reduction of oil production to stabilize oil prices under an OPEC framework. Both countries have borne the brunt of the downwards slant in oil prices since 2014 but it was an onerous task evolving an energy policy as they were in opposite camps on regional issues.
Eventually, economic interests brought them together and a deal was chalked out between OPEC and non -OPEC states to hold back on oil production so that prices could be controlled, this arrangement continues to date and has been extended. In turn, this news helped oil prices shoot up this week and Brent crude was up by more than 2% at $57.12 a barrel.
Clinching as many as 15 major agreements, at least a 100 Saudi businessmen took the opportunity to finalise important multi-billion energy and defence contracts, like the one with Russia’s ROSATOM for nuclear energy, since long Saudi Arabia has wanted to build 16 nuclear power stations for a total cost of $80bn in the long run. Catching the world’s attention, Al-Arabiya also announced that Saudi Arabia has agreed to purchase the famous S-400 surface -to -air missile system, giving no time-frame as to the availability.
Ostensibly, contracts have been signed with Rosoboron-export for the S-400, Kornet-EM system, TOS-1A, AGS-30 and Kalashnikov AK-103. Notably, Russia’s Rosneft is also expected to participate in the partial privatization of Saudi oil giant Aramco in 2018. Disclosing that memorandums will be signed, Amin al-Nasser, Chief Executive of Aramco explained that cooperation with Russian companies was planned in the fields of oil, gas, petrochemicals, renewable energy and advanced technology.
Joint investment deals worth more than $3 billion were agreed upon, according to Russian Energy Minister Alexander Novak , including a $1.1 billion agreement for Russian petrochemical firm Sibur to build a plant in Saudi Arabia. Boosting terms to a new high, these deals are the beginning of a viable long-term geo-economic partnership between Russia and Saudi Arabia.
Having made an improbable visit a reality, the Saudi Foreign Minister said new horizons had opened for Russia-Saudi ties that he could not previously have imagined. Speaking through an interpreter, he said, “Relations between Russia and Saudi Arabia have reached a historical moment.”
Diplomatically, this event could result in a potential peace settlement in Syria, better relations with Iran or a de-escalation and ceasefire in Yemen in the future. Initiating the dialogue, the Saudi King clearly made it known that Iran ‘should end its interference in the Middle East’ but notably did not demand that the Syrian President should be removed. Optimistically, it could prove to be a major turning point for Middle Eastern geopolitics, at worst, it could just pan out as a military and trade alliance.
Claimed by Russian foreign minister, Sergei Lavrov, as the moment when Saudi-Russian relations “reached a new qualitative level”, it symbolizes the new era of multi-polarity. The timing is particularly symbolic as the influence of the U.S. is on the decline in the Gulf, and its old allies are reaching out towards new possibilities, now it remains to be seen how the U.S. reacts to this new friendship developing at the expense of its interests. From the geopolitical point of view, this event marks the emergence of Russia as a growing power and strategic player in the Middle East.
DISCLAIMER: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy and position of Regional Rapport.