Zanganeh: No Pressure on Tehran to Join OPEC Cuts

Zanganeh: No Pressure on Tehran to Join OPEC Cuts

A thaw between Moscow and Riyadh helped push through 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.

But their desperate need to rescue oil prices brought them together a year ago and that partnership was the focus of talks Thursday between King Salman and President Vladimir Putin in Moscow.

These agreements are "expected to play a pivotal role in the growth and development of the military and military systems industry in Saudi Arabia", Saudi Arabian Military Industries (SAMI), the Sunni state's military industries firm said. The group's own forecasts show that even with demand for its oil likely to increase in 2018, reversing the cuts could potentially tip the market back into surplus.

The occasion is the first time a Saudi King has visited Russian Federation.

As part of a 3-day visit, King Selman will meet with Russian President Vladimir Putin and Prime Minister Dmitry Medvedev.

Iran has been backing Houthi rebels in Yemen, a close ally and next-door neighbor of Saudi Arabia.

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Putin has a passion for cars and once took former U.S. President George W. Bush for a drive in his vintage Soviet Gaz-21 at his residence outside Moscow.

Opec and its allies have already discussed prolonging their deal well into the second half of 2018, people familiar with the matter said in September. The Russian company Sibur has signed an agreement with Saudi Aramco to explore opportunities between the two countries.

Any move would also require the support of OPEC´s de facto leader Saudi Arabia.

The then-Deputy Crown Prince and Defense Minister Prince Mohammed bin Salman paid a high-profile visit to Russia in June 2015, which marked a reset in Saudi-Russian ties. "Now after the USA began working more closely with Israel, Saudi Arabia has started expanding its global ties".

"Saudi Arabia has started investing in the Russian economy, construction, and other spheres", he highlighted.

Output cuts by OPEC and non-OPEC producers were "working well", and compliance was at an acceptable level, the oil minister added. New York, London and Hong Kong are the main contenders.