Saudi king, Putin clinch billion-dollar energy, arms deals on landmark Russia visit

The leaders of the world’s largest energy exporters discussed an extension of an OPEC agreement to cap oil output and oversaw the signing of deals which officials said were worth billions of dollars.

Saudi Arabia signed preliminary agreements to buy Russia’s S-400 air defence systems and anti-tank guided missile systems and receive “cutting edge technologies,” said the Sunni state’s military firm, Saudi Arabian Military Industries.

The two countries also signed a series of multi-billion dollar investment deals including one to create a $1 billion fund to pursue energy projects.

“This is the first visit by a Saudi Arabian monarch in the history of our relations and that in itself is a landmark event,” Putin said as he welcomed 81-year-old King Salman to Moscow in an ornate gilded Kremlin hall.

“I’m sure your visit will boost the ties between our countries,” Putin added.

“We aim to strengthen our relations in the interests of peace and security, in the interests of developing the world economy,” the Saudi king responded.

Saudi Foreign Minister Adel al-Jubeir told journalists that “relations between Russia and Saudi Arabia have reached a historic moment.”

“Today we alone as the Russian Direct Investment Fund announced deals worth $2.1 billion,” said Kirill Dmitriyev, the head of the fund set up to attract investment.

Foreign Minister Sergei Lavrov said agreements came in the fields of “energy — not only traditional but also nuclear power — and also in cooperation in space exploration (and) agroindustry and infrastructure projects.”

– ‘Diversifying risks’ –

Saudi Arabia is the country that buys the most US arms and Washington and Riyadh in May announced a $110 billion deal to sell weapons to Saudi Arabia.

But Saudi, a long-standing ally of Washington, is keen to boost ties with Moscow as a major player in the Syrian conflict and a fellow oil producer with shared interests in supporting energy prices.

“We are certain that further strengthening of relations will have a positive effect on strengthening stability and security in the world,” his Saudi counterpart Jubeir stressed.

Fyodor Lukyanov, the Kremlin-connected chairman of the Council on Foreign and Defence Policy, said Riyadh saw closer ties with Moscow as expedient for the moment, and was “diversifying risks” by buying arms from both Moscow and the US.

“Saudi Arabia has recognised Russia as a significant player in a region that is important to it,” he told AFP.

“They respect Russia more now. But you shouldn’t think it’s forever.”

– Oil cap for ‘stability’ –

The leaders of the world’s largest energy exporters also discussed the OPEC agreement to cap oil output.

OPEC members have joined with Russia and other countries in cutting crude output in a pact that has helped prop up prices.

“We strive to continue the positive cooperation between our countries to achieve stability on world oil markets which promotes the growth of the world’s economy,” Salman said.

Russia and Saudi Arabia are heavily dependent on oil exports and the global plunge of the price of crude that began in 2014 lashed both their economies.

Putin said on Wednesday it was possible to extend an OPEC deal to cap oil output “at least until the end of 2018”.

– Focus on Syria, Yemen –

While Russia and Saudi Arabia are partners on the oil market, they are at loggerheads on Syria, where Moscow supports President Bashar al-Assad and Riyadh backs the opposition.

Lavrov said the Saudi monarch and Putin’s meeting saw a “particular focus on Syria, Iraq, Libya and Yemen.”

The two sides said they had common ground in a desire to rally Syrian opposition forces to take part in UN-backed peace talks.

Jubeir said that the countries “closely cooperate… on uniting the Syrian opposition and broadening its framework, in order to start the political process” at Geneva peace talks.