Saudi vs. Russia at World Cup. One goal: Business
It’s only fitting that Saudi meets Russia in the first game of the World Cup and the US is out. The coincidences are bewildering how Saudi-Russian relations are on the up and up, while those with the US from both sides have soured.
From Crown Prince Mohammed Bin Salman and the King himself visiting Russia this year and agreeing to trade deals worth $billions, to an OPEC agreement this November 30, Saudi-Russian rapport is at its peak, while Trump’s US is fighting an internal legal battle involving alleged Russian meddling in the country’s elections and shunning OPEC with shale plans of its own, while dealing with the rest of the world in an accusatory tone.
It’s no wonder Voice of America, a US news site, said about the World Cup match-up: “A World Cup shrouded in corruption controversies and struggling to attract sponsors could have the dreariest of starts on the field: a meeting of the lowest-ranked teams in the 32-team field. Host Russia and Saudi Arabia play June 14 at Moscow in an opener lacking global appeal.”
Can’t be farther from the truth. Need proof?
Saudi goes to Russia, twice
On October 5, 2017, Russia gave a hero’s welcome to King Salman, the first ever sitting Saudi monarch to visit the country, who led a high-profile and highly significant delegation to Moscow that saw billions of dollars’ worth of joint investment deals.
The Kremlin said that the King signed deals to further develop bilateral cooperation in the trade, economic, investment and cultural-humanitarian areas and joint investments worth over $3bn, including a $1.1 billion agreement for Russian petrochemical firm Sibur to build a plant in Saudi Arabia, According to Reuters.
The Kremlin’s official site said: “The sides also signed interdepartmental memorandums of understanding and cooperation in the areas of communications and ICT, labour, and the peaceful use of nuclear energy.”
Most importantly, an agreement was reached to establish a $1bn energy investment fund with the participation of the Public Investment Fund of Saudi Arabia (PIF), Aramco and the Russian Direct Investment Fund (RDIF), as well as the agreement on investments of up to $100 million by the PIF and RDIV in the United Transport Concession Holding.
This came after the Crown Prince visited Russia in May 2017 and met with President Putin and committed $10 billion to invest in Russia’s direct investment fund.
Russia and Saudi set off on a closer relationship in 2016 when Russia and Saudi led OPEC announced they would restrict oil output in a bid to support global oil prices.
OPEC, Russia and 9 other producers then agreed to cut output by about 1.8 million barrels per day (bpd) to get rid of over supply that kept oil prices from rising in value.
Reuters said Russia and OPEC extended the deal to the end of 2018, despite Moscow’s concerns that a rise in prices, as is the case recently with it reaching $60, could prompt a spike in crude production in the United States, which was not participating in the deal.
Reuters added that U.S. shale oil producers effectively triggered the global oil glut of recent years.
US position precarious
When Saudi visited Russia in October and earlier in May, it came at a time when the Trump administration was sending unclear messages about its involvement in the Middle East’s and Gulf’s affairs.
And despite a visit by Trump to Riyadh last May, and signing a weapons’ deal worth nearly $110 billion immediately, and $350 billion over 10 years, according to CNBC, it did little to strengthen ties between the two countries.
The US’s growing tensions with North Korea, an internal crisis involving alleged collusion with Russia to win Trump the presidency, Bloomberg noting recently that shale oil producers can pump at current oil prices, and even a spat with the UK over re-tweets of extremist videos that sparked outrage in Britain and elsewhere, have all kept America out of the picture.
And out of the World Cup.
No matter what the Saudi-Russian soccer result is, this is one match to be closely watched globally and that both stand to gain from, again.