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Putin Hosts Saudi King to Talk About Oil, Syria

07 October 2017

This is the first visit to Russian Federation by a Saudi monarch and both the countries have already struck a deal on weapons' sale and how to stabilise the oil market.

In a sign of the improving relationship, Saudi Arabia signed preliminary agreements with Russian Federation to buy S-400 air defence systems, as well as anti-tank weapons and multiple-rocket launchers, the Saudi Arabian Military Industries said.

King Salman even brought his own furniture along to the luxury hotels booked by the Saudi government for the visit.

A thaw between Moscow and Riyadh helped reach November's deal in which Opec and 10 other oil-producing countries, including Russian Federation, agreed to cut their production in a bid to combat a supply glut and shore up crude prices.

Russian Energy Minister Alexander Novak said in an interview broadcast on October 2 that the planned $1-billion fund to invest in energy projects was part of efforts to strengthen cooperation in oil, gas, electricity, renewable energy and other projects.

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"This partnership between Russian Federation and Saudi Arabia has catalyzed cooperation of an unprecedented coalition of 24 countries (OPEC and non-OPEC)". Putin said. "I think that all things change". The agreement remains in force until the end of March 2018.

The Saudi courtship of Russian Federation reflects a convergence of interests between the nations, both of which want to spur a recovery in crude prices.

Khalid Bin Abdulaziz Al-Falih, Saudi Arabia's energy minister and president of OPEC, speaks as Alexander Novak, Russia's energy minister, left, listens during a news conference following the 172nd Organization of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria, on Thursday, May 25, 2017.

He further emphasized the importance of preserving the unity of Iraq and the integrity of its internal front.

Ties between the two countries were often strained in the past.

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Saudi Arabia and Russian Federation have a joint interest in diversifying their economies away from oil as the price is still trading well below historic highs.

They underlined the need for a peaceful solution to the conflicts in the region, he told a joint news briefing with his Saudi counterpart Jubeir after the two leaders met.

Putin and King Selman are also expected to establish an investment fund of about $1 billion to support energy projects.

The price of oil collapsed from near $120 a barrel in June 2014 due to weak demand, a strong dollar and booming U.S. shale production.

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Putin Hosts Saudi King to Talk About Oil, Syria