During the G20 summit earlier this month, Saudi Crown Prince Mohammad bin Salman met with Russian President Vladimir Putin. After the meeting, Putin announced that Russia and Saudi Arabia had agreed to extend an oil production cut agreement for another nine months. When the extension was formalized several days later, OPEC Secretary General Mohammad Barkindo touted the deal as a “Catholic marriage” and boasted that it would last an “eternity.”
Such cooperation between the two countries would have surprised many international observers just a few years ago. Back then, Saudi Arabia and Russia appeared headed for showdown over Syria and global oil prices. Now however, one of America’s closest allies in the Middle East and one of its leading adversaries are increasingly finding common ground.
At a time when many foreign investors are leaving Russia, Saudi Arabia is investing billions of dollars into the Russian economy. Moreover, Saudi Arabia and Russia are increasingly coordinating to influence global oil prices. In a few instances, Saudi Arabia has even sided with Russia over the United States. For example, Riyadh has publicly opposed further U.S. sanctions against Moscow and abstained from several UN votes condemning Russian actions in Ukraine. (RELATED: Saudi Arabia Is Trying To Execute And Possibly Crucify Teen Who Participated In Protest When He Was 10 Years Old: Report)
Dmitry Frolovsky, an independent Moscow-based geopolitical analyst, told The Daily Caller that the current level of cooperation between Saudi Arabia and Russia is “unprecedented.”
“The convergence with Saudi Arabia over the past several years in many ways is surprising even to Russian strategists because no one expected that Russia’s campaign in Syria could help improve relations with the Persian Gulf monarchies so much,” he said.
Riyadh and Moscow have historically had a contentious relationship. As recently as 2013, Saudi Intelligence head Prince Bandar bin Sultan tried to persuade Putin to alter his position on Syria by raising the prospect of terrorism at the Sochi Olympics games, according to a report from The Telegraph.
However, the Obama administration’s foreign policy in the Middle East made Saudi Arabia rethink its approach to Moscow. Riyadh was alarmed by the Obama administration’s favorable reception of the Arab Spring, which swept away several prominent pro-American dictators in the region. When the United States signed the Iran nuclear deal in 2015, the kingdom regarded the move as a betrayal.
On the other hand, Russia’s military intervention in Syria left a strong impression on Saudi Arabia. Thus, at a time when Saudi Arabia sought to hedge its bets against Washington, Russia seemed likely a formidable option.
In 2016, Saudi Arabia and Russia signed their first deal on limiting oil production to combat falling energy prices. Saudi King Salman visited Moscow the subsequent year, becoming the first Saudi monarch to set foot in Russia.
Economics is increasingly at the forefront of Saudi-Russia cooperation. While many Western investors shunned Russia after the 2014 annexation of Crimea, Riyadh instead expanded its portfolio in the country. In 2015, Saudi Arabia pledged to invest $10 billion into the Russian economy. A quarter of that sum has been invested so far.
Last October, Saudi Arabia’s sovereign wealth fund became a partner of a Russo-Chinese investment fund and contributed $500 million to the project. That month Saudi Arabia also promised to provide $5 billion for an LNG project in the Arctic by Russian gas company Novatek.
Some in Moscow are optimistic that 2019 could be a breakthrough year for Saudi investment in Russia. Kirill Dmitriev CEO of Russia’s sovereign wealth fund, recently told Saudi website Argaam that Russia and Saudi Arabia were exploring investing $2 billion this year on 25 different joint projects.
Alexey Khlebnikov, a Middle East expert at the Russian International Affairs Council stated that Saudi investments help provide Russia with relief from Western sanctions.
“They do not fully take away the pain [of Western sanctions], they do not fully resolve the problem,” he said. “But it is one of the alternative sources of foreign direct investment into the Russian economy.”
Khlebnikov added, “There is big potential, in the future [Saudi investment] is likely to increase because the dynamics are favorable.”
However, Yuri Barmin, Middle East and North Africa Director at Moscow Policy Group, offered a more pessimistic assessment about the long-term prospects for further Saudi investment in Russia.
“The problem is that the Saudis are very conservative investors and Russia politically is a very risky market to invest in,” he said.
Saudi Arabia’s economic interests in Russia have made it wary of U.S. efforts to increase pressure on the country. In March, Saudi Minister of Energy Khalid Al-Falih publicly opposed a new proposed U.S. sanctions package targeting Moscow.
“Russia is a big supplier of gas to Europe, oil to China. If [new sanctions] happen, it will affect Europe, China and the whole world,” the minister stated.
Saudi Arabia is also increasingly reluctant to criticize Russian foreign policy. In December 2017 and 2018, the kingdom abstained from two UN General Assembly resolutions condemning Russia conduct towards Ukraine. This move marked a sharp change of policy. As late as 2016, Saudi Arabia had supported similar resolutions.
Khlebnikov explained that Riyadh and Moscow have an unspoken understanding to not criticize one-another’s foreign policy. (RELATED: Behind The Growing Rift Between Russia And Iran)
“Russia avoids offering commentary and condemnations of Saudi Arabia’s war in Yemen, and Saudi Arabia likewise takes a neutral position towards Russian policy in Ukraine,” he said.
Despite the improved relations between Russia and Saudi Arabia, all the Russian experts The Daily Caller spoke to emphasized that the two countries remained far away from a partnership. Saudi Arabia and Russia still have numerous conflicts of interest. Moreover, Riyadh’s alliance with Washington and Moscow’s strong ties with Tehran limit the ability of both countries to become fully-fledged partners.
So far, however, the two countries have managed to draw closer together despite their differences. All the more is impressive is how far this surprising development has fallen under the radar. At a time when Saudi Arabia has successfully pushed Washington to get more involved against Iran, it has also made significant inroads with a top global competitor of the United States. By upping its Russia investments and striking oil deals with Moscow, Riyadh has helped the Kremlin avoid international isolation and strengthen its economy.
Saudi Arabia and Russia may not be headed for a partnership, but Washington is unlikely to welcome the current trajectory of their relationship.