Deepening Russia-Saudi Ties: A Shift in Global Oil Power?
As Saudi Arabia and Russia strengthen their partnership, their combined sway over global oil supply is increasing. Could this alter the power dynamics within energy markets?
Russia and Saudi Arabia each pump between 9 and 10 million barrels of oil daily. Collectively, they represent more than 20% of total global oil production.
This grants them substantial authority over supply, despite Western sanctions and price restrictions on Russian crude following the conflict in Ukraine, as well as upheaval caused by the blockade of the Strait of Hormuz.
**OPEC minus a key member**
As the largest member of the Organization of the Petroleum Exporting Countries (OPEC), Saudi Arabia has historically dominated the formal coalition, working to stabilize oil prices through supply management.
Before the war in Iran began, OPEC nations β Iran is a member β produced over 35% of the world's crude oil and hold nearly 80% of proven global oil reserves.
However, the group's influence has diminished over time due to internal disagreements and the substantial growth of US shale oil output.
In April, the United Arab Emirates (UAE), then OPEC's third-largest producer, declared it would exit the group on May 1 after nearly six decades, reducing OPEC's membership to 11 countries.
The oil-rich nation, which possesses considerable spare capacity and was dissatisfied with production quotas, can boost output as soon as the Strait of Hormuz reopens.
**Seeking alliances to remain relevant**
This is not the first instance of a member leaving β or rejoining β OPEC, but the UAE offered production flexibility, and its departure will weaken the cartel's pricing power over the long term.
Perhaps anticipating this, Saudi Arabia has been moving closer to Russia, which is not an OPEC member. The two nations are doing this directly and through the looser alliance known as OPEC+, comprising OPEC members and additional oil-producing countries, established in 2016.
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But currently, it is Russia and other non-Gulf petroleum exporters who are gaining, as Iran effectively blocks the Strait of Hormuz, according to Mark N. Katz, a nonresident senior fellow at the Atlantic Council, a Washington, D.C.-based think tank.
"Western and other buyers have been willing to increase their purchases of sanctioned Russian oil to avert a sharp oil price surge, which would harm their domestic economies," said Katz, who has tracked Moscow's relations with the Middle East since the early 1980s.
**The St. Petersburg Economic Forum**
Among industry analysts and political observers, it has not gone unnoticed that the two are collaborating more closely than ever. Over the past two years, their energy ministers have repeatedly aligned on oil output.
Russian President Vladimir Putin visited Riyadh in 2019 and again at the end of 2023, when he met with Crown Prince Mohammed bin Salman. Separately, Russian Foreign Minister Sergey Lavrov has held numerous meetings with his Saudi counterpart in recent years.
To underscore this revitalized working relationship, Russia has now designated Saudi Arabia as its guest country at this year's St. Petersburg International Economic Forum (SPIEF), scheduled for June 3-6, 2026.
"It is highly symbolic that Saudi Arabia will serve as guest country at SPIEF in 2026 as we celebrate the 100th anniversary of the establishment of diplomatic relations," Lavrov said ahead of the event.
Though some in the West view the gathering as a Russian propaganda exercise, it brings together business and political leaders. Last year, the event drew 24,200 participants from 144 countries and territories, according to organizers.
**Looking beyond oil and OPEC**
With sluggish global growth and the rise of renewables, there is much to discuss. A decade ago, Saudi Arabia introduced a program called "Vision 2030" to diversify its economy and reduce its reliance on oil.
As part of this vision, it has floated ideas such as hosting major sporting events, mining gold, copper, and zinc, building massive AI data centers, or focusing on international tourism beyond pilgrimages to Mecca and Medina.
Russia, in contrast, is struggling under Western sanctions, relies heavily on a "shadow fleet" of oil tankers, and sells most of its crude at discounted rates. Its faltering economy is no longer the investment opportunity it once was.
"I don't believe the Saudis see Russia as an attractive country to invest in at present," said Katz. "The West, China and other Asian countries offer far better opportunities for cooperation on infrastructure, technology and finance."
This, along with internal OPEC troubles, will likely be welcomed by Donald Trump.
While the US has sought partnerships with Moscow, it has been less keen on its allies doing the same, Katz noted. "Any declining Saudi enthusiasm for doing business with Russia will be seen by the Trump administration as an opportunity for American business."
**Staying friendly amid shifting alliances**
For now, the Russia-Saudi alliance appears focused on oil. Both are likely to welcome the forecast that global oil demand will grow by 1.2 million barrels per day in 2026 and 1.5 million barrels per day the following year, according to OPEC's latest monthly report.
Still, smooth sailing may not be guaranteed for this duo, given the many developments in the background.
Saudi Arabia is displeased with Russia's backing of Iran. Meanwhile, Russia wants to ensure Riyadh does not join the West's sanctions regime related to Ukraine.
On oil, Saudi Arabia also has longer-term objectives and is keen to prevent a supply glut that could push prices down. Russia has a more immediate need to replenish its finances.
Ultimately, Katz would not be surprised if Saudi Arabia's increased cooperation with Russia is actually a strategy to attract more attention from Washington. It is a tactic Riyadh has employed "on and off since at least the 1970s," he said.
Edited by: Andreas Becker