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Russia, Saudi Arabia Hail Oil Output Deal For Stabilizing World Markets

Russian President Vladimir Putin (left) with Saudi Deputy Crown Prince Muhammad bin Salman on May 30
Russian President Vladimir Putin (left) with Saudi Deputy Crown Prince Muhammad bin Salman on May 30

Russia and Saudi Arabia on May 30 praised their agreement on oil production curbs, which they said had helped stabilize global oil prices, and agreed to pursue more cooperative efforts.

At a meeting at the Kremlin, Russian President Vladimir Putin welcomed Saudi Arabia's Deputy Crown Prince Muhammad bin Salman, who is in line to become king and currently is in charge of defense and energy affairs.

It was the second meeting between the two men over the past year following a breakthrough meeting in China, where the two as heads of the world's largest oil-producing countries first agreed to cooperate in curbing production to shore up collapsing prices.

"Agreements in the energy sector are highly important to our countries. We are grateful to you for your ideas and the joint work between OPEC and the countries which are not part of the cartel," Putin told Salman. "The actions we agreed are helping to stabilize the situation on the world hydrocarbon markets."

Russia, Kazakhstan, Azerbaijan, and several other producers outside OPEC joined the Saudis, Iran, Iraq, and other cartel members in a November 2015 agreement, which was recently renewed, to cut global production by 1.8 million barrels a day.

"The relations between Saudi Arabia and Russia are going through one of their best moments ever," Salman said. "The most important thing is that we are succeeding in building a solid foundation to stabilize oil markets and energy prices."

Since the Russia-OPEC agreement went into effect, premium oil prices have stabilized in the $40 to $50 a barrel range after plummeting to under $30 in January 2016. They remain far below levels over $100 reached in 2014, however.

Saudi Arabia for decades has been the largest producer in OPEC and has dominated the cartel, while Russia never joined the group and for decades refused to cooperate with it.

But the oil price collapse between 2014 and 2016 caused deep recessions and serious budgetary hardships in both countries, putting pressure on them to find ways to cooperate.

For Salman, the visit to Moscow followed by only days a summit in Riyadh with U.S. President Donald Trump at which deals were made to purchase arms and pursue terrorists. But the United States, while a major producer of oil, never joined the OPEC deal.

Putin and Salman said they intend to keep cooperating beyond the current nine-month extension of their agreement on oil production.

At the talks, the Public Investment Fund of Saudi Arabia signed a memorandum of understanding with the Russian Direct Investment Fund to explore joining a consortium of investors in a Moscow real estate project.

The Russian fund said both parties also are evaluating more possible projects in retail, real estate, alternative energy projects, transportation, and logistics infrastructure.

Putin and Salmon minimized their big differences over the war in Syria, where they back opposing sides.

"We have a lot of common ground. As far as our disagreements are concerned, we have a clear mechanism of how to overcome them. We are moving forward quickly and in a positive way," Salman said.

"We work together on sorting out difficult situations, including in Syria," Putin said.

With reporting by Reuters, AFP, TASS, and Interfax
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