Russia Says Improved Iran-Saudi Ties Would Help Oil Prices

A worker checks the valve of an oil pipe nea the West Siberian city of Kogalym, Russian new agency RIA quoted a senior official at the foreign minstry as saying that improved Iran-Saudi relations could help oil prices. Russia, January 25, 2016. Russia said on Thursday that OPEC kingpin Saudi Arabia had proposed global oil production cuts of up to 5 percent in what would be the first universal deal in over a decade to help clear a glut of crude and prop up sinking prices. Picture taken January 25, 2016. REUTERS/Sergei Karpukhin

MOSCOW, Feb 15 – Russia wants to see improved relations between Iran and Saudi Arabia at a time when joint action is needed to influence global oil prices, the RIA news agency on Monday quoted Zamir Kabulov, a senior official at Russia’s Foreign Ministry, as saying.

Russia, one of the world’s top oil producers, has repeatedly refused to cooperate with the Organization of the Petroleum Exporting Countries in recent years despite the falling price of oil, the lifeblood of its economy.

Any hope of sealing a global output deal has so far foundered on Iran’s position. Tehran is boosting production to try to regain market share after sanctions were lifted, paving the way for it to re-enter the market after a long absence.

The prospect of cooperation between Iran and leading producer Saudi Arabia is further complicated by the fact that the two countries are geopolitical foes who support different sides in conflicts in both Syria and Yemen.

“We all need stability on the oil market and a return to normal (crude) prices,” RIA quoted Kabulov as saying.

“And these are the key nations, especially Saudi Arabia and Iran, which is striving to return to the oil market, anticipating the removal of sanctions.”

Some OPEC countries are trying to achieve a consensus among the group, while some non-members back an oil production freeze, sources familiar with the discussions said last week, a possible attempt to tackle the global glut without cutting supply.

Top exporter Saudi Arabia might be warming to the idea, though it was too early to say whether it would give its blessing because any deal would mainly depend on a commitment by Iran to curb its plan to boost exports, the sources said.

Even as officials on both sides discussed the possibility, Russia and OPEC continued to pump oil at some of the highest levels in recent times last month, suggesting both were locked in a fierce struggle for market share.

Benchmark Brent crude has fallen around 70 percent since mid-2014.

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