Russia And Saudi Arabia Agreement

On the first day of the negotiations, a set of bilateral documents[51] was signed for oil, military and space exploration. [52] [53] Arms sales worth $3 billion, expected to be completed by the end of October 2017, in accordance with Saudi Arabia`s attempt to locate the manufacture of weapons, saw the possibility of a transfer of technology for the local production of Russian Kornet-EM anti-tank missiles, TOS-1A rocket launchers and AGS-30 automatic grenade launchers, the latest version of the Kalashnikov assault rifle and long-range S-400 missile system. [54] [55] [56] [57] Saudi Arabia has agreed to invest $1 billion in Russian energy projects and Russian gas processing and petrochemical company Sibur has committed to build a facility in Saudi Arabia in a separate $1.1 billion contract. [58] Regarding the extension of the oil production reduction contract until the end of 2018, which had been proposed by Vladimir Putin as a possibility on the eve of talks with the king,[59] the Kremlin stressed after the discussions that Vladimir Putin had not proposed the extension, but had allowed it as a possibility in market conditions. [60] [61] The Russian media and experts made much of the Saudi Foreign Minister`s comments on the prospects for lifting Russian sanctions, but also warned that genuine cooperation had not yet been established between the countries. [62] Following the COVID 19 pandemic, plant production and transportation declined, which also reduced aggregate oil demand and drove down oil prices. [14] February 15, 2020, the International Energy Agency forecast that demand growth would fall to its lowest level since 2011, with growth of 325,000 barrels per day over the full year, to 825,000 barrels per day and a decline in consumption of 435,000 barrels per day in the first quarter. [15] Although global oil demand has declined, a drop in demand in Chinese markets, the largest since 2008, triggered an OPEC summit on March 5, 2020 in Vienna. At the summit, OPEC agreed to further reduce oil production by 1.5 million barrels per day by the second quarter of the year (an overall production cut of 3.6 million bpd from the original 2016 agreement), and the group is expected to review that policy on June 9 at its next meeting. [16] OPEC has asked Russia and other non-OPEC members to comply with OPEC`s decision. [13] On 6 March 2020, Russia rejected the request, marking the end of the unofficial partnership, as oil prices fell by 10% after the announcement. [17] [18] On March 8, 2020, Saudi Arabia launched a price war with Russia, which facilitated a quarterly drop of 65% in the price of oil. [1] In the first weeks of March, U.S.

oil prices fell by 34%, crude oil by 26% and Brent oil by 24%. [2] [3] The price war was triggered by a breakdown in the dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over planned oil production cuts in the midst of the COVID 19 pandemic. [1] Russia left the agreement, which led to the downfall of the OPEC alliance.