Reuters: Saudi Arabia and the UAE persuaded Russia to cut OPEC supplies during the Abu Dhabi Grand Prix
Economy News - Baghdad
Saudi Arabia turned to its ally the United Arab Emirates when it needed help to persuade Russia to agree to deeper cuts in oil supplies during the OPEC meeting this month.
Sheikh Mohammed bin Zayed, the de facto ruler of the UAE, hosted important talks between Saudi Arabia and Russia in Abu Dhabi, as the three countries reached what will become one of the deepest supply cuts in a decade, four sources familiar with the negotiations told Reuters.
Details of the negotiations were not revealed before OPEC and independents announced the cut on December 6.
The UAE’s role in the talks represents a change from past years and highlights Russia’s growing influence in the region. Since Russia began cooperating with OPEC on supply agreements in 2016, Riyadh and Moscow have led oil supply decisions ahead of OPEC meetings without significant interference from other producers. Two sources said that this time Riyadh wanted Abu Dhabi to help increase pressure on Moscow to agree to the cuts.
Russia saw the agreement as a way to boost vital ties in the region.
"The message that Russia wanted to send is that it supports Saudi Arabia at a critical moment and that the alliance is strong. The UAE's role is not surprising. Russia has very strong ties with the UAE," one of the sources said.
Russia and Saudi Arabia are among the largest oil exporters in the world, where together they account for 20 percent of global production. Three of the sources said that the participation of the Emirates, which produces 3 percent of the world's oil supplies, came after Moscow hinted at its opposition to new supply cuts before OPEC meetings in Vienna on December 5 and 6.
The Russian direct investment fund and the Russian Energy Ministry, which play a major role in OPEC talks, declined to comment. The government contact centers in Saudi Arabia and the UAE did not respond to requests for comment.
Saudi Energy Minister Prince Abdulaziz bin Salman organized the deep cuts and discussed them with Russian officials since October, when Russian President Vladimir Putin visited Riyadh, according to three sources. Since then, Saudi and Russian officials have shuttled between Riyadh, Moscow and Abu Dhabi to negotiate the oil supply deal.
On November 27, Saudi Crown Prince Mohammed bin Salman and Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed met in the Emirates.
Two sources said that the Saudis informed Sheikh Mohammed bin Zayed that day of a proposal to make bigger cuts and offered details of the cuts that would be distributed mainly between Saudi Arabia, Russia, the Emirates, Kuwait and Iraq.
The sources told Reuters that on December 1, the Saudi crown prince and his brother Energy Minister Prince Abdulaziz met with Kirill Dimitriev, the Kremlin's adviser and head of the $ 10 billion sovereign wealth fund, on the sidelines of the Abu Dhabi Grand Prix. One source said that Dmitriyev went to Riyadh the next day to inform the Saudi crown prince and his brother that Russia agreed to the cuts.