Saudi energy minister says Russia helped to breathe back life into OPEC
The Gaza Post|The News of Palestine-Saudi Arabia
Saudi Arabia’s energy minister said that Russia has helped to breathe new life into OPEC and that shale can be a major contributor to the market in years to come.
“This partnership between Russia and Saudi Arabia has catalyzed cooperation of an unprecedented coalition of 24 countries (OPEC and non-OPEC). It has breathed back life into OPEC which found itself, quite frankly, unable to swing its production as supply was persistently high in 2014 and global inventories were steadily rising ahead of demand,” Saudi Arabia Energy Minister Khalid Al-Falih told CNBC on Thursday.
Al-Falih was optimistic that oil markets were continuing to rebalance but added prices were not for him or his counterpart Russia Energy Minister Alexander Novak to determine.
“(Prices) are ultimately for the markets to determine based on marginal cost of productions and expectations of supply and demand. But as I think of fundamentals I am more optimistic than I have been in the last two or three years, demand is healthy around the world in developed and developing countries.”
King Salman visits Russia
Russia is rolling out the red carpet for King Salman of Saudi Arabia this week, with the monarch leading a high-profile and highly significant delegation to Moscow.
The Kremlin said that King Salman was due to meet Russian President Vladimir Putin on Thursday and “the leaders will consider joint steps to further develop bilateral cooperation in the trade, economic, investment and cultural-humanitarian areas.”
The leaders are set to sign joint investment deals worth more than $3 billion on Thursday, Russian Energy Minister Alexander Novak told the Financial Times on Wednesday, including a $1.1 billion agreement for Russian petrochemical firm Sibur to build a plant in Saudi Arabia.
The visit is just the latest sign of increasingly cordial relations and closer economic and political ties between the two oil giants. The countries embarked on a closer relationship last year when Russia and the 14-member oil-producing organization OPEC – with Saudi Arabia being its de factor leader – announced they would restrict oil output in a bid to support global oil prices.