Russia’s 2022 invasion of Ukraine has not only resurrected the specters of the Korean War in the 1950s and the Cuban Missile Crisis in the 1960s but has also driven a large wedge between Russia and Western nations, creating a rift deeper than any witnessed in recent history. Concurrently, Russia has been forging increasingly strong ties with other nations, including those in the Middle East.
As Russian-American and Russian-European relations continue to be dissected in numerous scholarly works, another narrative unfolds—one that concerns Russia’s evolving alliances with the Arab world and a significant pivot in its foreign policy approach. Post-Soviet Russia has largely inherited Soviet foreign policy toward the Middle East. In analyzing the contemporary dynamics of Russian-Arab cooperation, it is essential to understand the historical roots of this engagement and the implications for global geopolitics.
Early Post-Soviet Period: Calls for Cooperation and Empty Promises
After World War II, the Soviet Union was establishing and nurturing ties with the “progressive” and socialist-leaning regimes in Algeria, Egypt, Iraq, Libya, South Yemen, and Syria, while opposing “reactionary” Gulf monarchies. The Soviet invasion of Afghanistan in 1979 brought the image of the Soviet Union in Arab eyes to a low, especially in countries such as Saudi Arabia that were supporting anti-Soviet guerilla fighters during the Soviet–Afghan War. At the same time, the Soviet Union was connected to oil-producing countries in the Arab world in complex ways; Soviet-Arab relations alternated between collaboration and competition while being significantly influenced by oil-production strategies. Since Saudi Arabia was playing a leading role in the Organization of the Petroleum Exporting Countries (OPEC) and was a crucial oil producer, Russia-Saudi relations often saw intervals of friendliness and alienations.
After the Soviet Union’s dissolution in 1991, Russia inherited its complex relationships with OPEC countries, including Saudi Arabia, but lacked a clear strategy for engagement. In addition, Russian oil production was in a free fall as a result of economic crises, organizational upheaval, and years of underinvestment and overproduction during the late Soviet period. Therefore, there was less interest on the Saudi side to woo Russia into cooperation with OPEC. The beginning of the First Chechen War in 1994 also contributed to the mutual wariness. The Russians suspected Saudis of supporting the Chechen rebels and instigating separatism, and indeed, some Saudis were fighting on the side of the rebels, while Saudi-based charities were collecting funds for Chechen causes (both charitable and military). At the same time, the stories of atrocities committed by Russian troops during the cleanup operations in Chechen villages were causing an uproar in the Muslim world and diminishing the goodwill that post-Soviet Russia might have had.
The late 1990s and early 2000s saw oil price drops and economic crises, prompting Saudi Arabia to repeatedly reach out to Russia for cooperation on oil-production cuts. However, Russia struggled to enforce these cuts due to the privatization of its oil industry, weak government, and the unique sensitivities of Russian oil companies to production levels rather than price due to the design of the Russian tax system. The situation put further strain on Moscow’s reputation with OPEC.
By the early 2010s, both Russia and Saudi Arabia had come to recognize each other’s significant roles in the global oil market. Despite the tensions—particularly related to Russia’s direct support for President Bashar al-Assad’s government in the Syrian conflict—Saudi Arabia was open to Russian membership in OPEC. But Russia, seeing itself as a rising power as a member of the G8, the World Trade Organization, and possibly the Organization for Economic Development, was unwilling to cede influence or align its policies with those of others. It preferred to maintain a degree of independence while benefiting from the market conditions shaped by OPEC. But soon, its position would change due to increased geopolitical tensions.
Creation of OPEC+: A New Era for the Saudi-Russian Relationship
The period between 2014 and 2020 marked a notable shift in global oil dynamics, with increased cooperation between OPEC and non-OPEC members, particularly between Saudi Arabia and Russia. Evolving strategic political and economic interests largely drove this shift.
Russia’s annexation of Crimea in the spring of 2014, followed by the conflict in Donbas, led to its expulsion from the G8 and ignited a prolonged confrontation with Western nations. As a result, Moscow found itself increasingly isolated and compelled to seek new alliances.
Meanwhile, the United States experienced a surge in oil production due to the “shale gale,” which significantly boosted U.S. oil output, adding 3 million barrels per day (equivalent to 9 percent of OPEC’s production at the time) in the three years leading up to July 2014. This increase contributed directly to a dramatic shift in the global oil market dynamics. The market responded to this surge in supply with a sharp decline in oil prices, from the average of $108.93 per barrel of Brent in the first half of 2014 to $55.27 per barrel by the year’s end. Unlike in 1998, 2001, or 2008, this drop was not caused by a demand shock due to an economic crisis but rather by a major technological breakthrough. Therefore, the price could not be expected to recover alongside economic improvement. Additionally, it became evident that OPEC, with its diminishing market share, no longer had the capacity to single-handedly stabilize the market.
In January 2015, Salman bin Abdulaziz became the new king of Saud Arabia, after the death of his father King Abdullah. This was also the start of the meteoric rise of Prince Mohammed bin Salman. The young prince was not as pro-American as the traditional Saudi establishment and was looking for diplomatic breakthroughs that would differentiate him in a race to become the successor of the throne. In his view, establishing a working relationship with Russia might look like a strong win. Russia was positioning itself as a power broker in Yemen, without getting too close to any of the factions. In March 2015, just a month after Mohammed bin Salman was appointed the defense minister, Saudi Arabia started a military operation against the Houthis. Having an understanding with Russia on Yemen was important for the developing relationship and in June 2015 the prince visited the St. Petersburg International Economic Forum, where he met Russian President Vladimir Putin and then energy minister Alexander Novak.
This shift in the political calculation likely catalyzed discussions about a potential overarching deal between Russia and OPEC. But it took another year and a half and a change of the energy minister in Saudi Arabia before an agreement was signed.
Russian and Saudi officials started their discussions almost immediately. The shift toward a collaborative framework occurred after Ali al-Naimi, longtime Saudi oil minister with strong memories of the earlier failed attempt of cooperation with Russia stepped down for Khalid al-Falih, who took a pragmatic approach and was prepared to start from a clean slate. Al-Falih and Novak managed to build a strong personal relationship and trust, which led to a breakthrough. In late 2016, OPEC signed a declaration of cooperation with ten additional countries and, most importantly, Russia.
Initially, this agreement was seen as a temporary measure and to this day there are no documents committing any non-OPEC members to long-term cooperation. Production management has also been done mostly on a six-month basis. In practice, in the eight years since signing the agreement, the group has worked with little distinction between the OPEC and non-OPEC members. Effectively, Saudi Arabia and Russia hold veto power in the discussions. The United Arab Emirates (UAE) also holds a strong, albeit secondary, voice. Looking at the history of production swings, these three countries have the most influence on OPEC+ production levels, while other members have more symbolic roles. Some members consistently produce below their allocated quotas due to technical challenges, while others exceed their quotas, which is often tolerated because the impact is not significant.
Since 2014, and particularly since 2022, OPEC+ has been one of the few international organizations in which Russia is viewed as an important member with a decisive voice. The Russian Ministry of Energy has implemented measures to monitor and control oil production on a weekly basis, ensuring its production is reasonably close to OPEC+ agreed levels. Technically, the government cannot give orders to private businesses and even government-owned oil companies, comprising the Russian oil sector; they voluntarily agree to participate in the cuts and the government plays a coordinating role. Since the beginning of Putin’s era, the balance of power in Russia was shifting from the oligarchs and oil companies towards the state and, unlike in 1998 or 2008, from 2017 onward the suggestions from government were taken much more seriously by private sector companies
The close relationship between Putin and Igor Sechin, the chief executive officer of the largest Russian oil company Rosneft, illustrates the importance of the OPEC+ agreement for Putin. Widely considered one of the closest lieutenants of Putin, Sechin manages to secure many favors from the president. Sechin has been a vocal critic of the OPEC+ agreement, as it impedes his empire-building ambitions and makes it more difficult to justify multibillion-dollar investments in new megaprojects funded through tax cuts. Unlike many of his other “policy recommendations,” Sechin’s appeal to Putin in 2019 to leave OPEC+ was ignored.
From 2016 until late 2019 the OPEC+ agreement worked well as oil prices stabilized and increased. After the oil price plunge of 2014, global investment in the oil industry shrunk by 45 percent, falling below natural production decline replacement levels. By the end of the decade, overcapacity created before 2014 was already absorbed. Russian-Saudi agreements in the energy sector were facilitated by strong personal relationships between the two energy ministers and their aides. Both sides attempted to establish wider cooperation between Saudi Aramco and Russian oil companies, but they were not too successful. There were no chances for Russian oil companies to participate in projects in Saudi Arabia, and Saudi Aramco did not need any projects in Russia.
The Oil Price War of 2020
The Saudi-Russian relationship was tested during the oil price war of 2020. From 2016 to 2019 OPEC+ focused on stabilizing the oil market. Their strategy aimed to manage market expectations, eliminate excess supply, and compensate for shortages caused by accidents, without pushing prices above sustainable levels or encouraging competition through higher prices.
During the fall of 2019, the Saudis in OPEC+ started to advocate a return to the old policies, which meant giving up market share in the hopes that higher prices would compensate for volume loss. This change in policy was the result of changed leadership. In September 2019, the Saudi oil industry veteran al-Falih was replaced by Prince Abdulaziz bin Salman, Mohammed bin Salman’s half-brother and the first royal to become an energy minister of Saudi Arabia. The Crown Prince had laid down ambitious plans for the kingdom and was looking for additional revenue to fund them. His brother, Abdulaziz bin-Salman, thought he knew how to increase revenues: cutting oil production to trigger higher prices. Initially, Saudi Arabia tried to convince its OPEC+ partners by demonstrating leadership and unilaterally and voluntarily reducing its production, hoping that others, Russia in particular, would see the light and reduce their production as well.
For the Russians, however, following this approach proved difficult; Novak was constantly battling Sechin’s calls to abandon OPEC+ altogether. The rest of the Russian oil industry was also wary that production cuts would result in an encore of the 1980s, when Saudi production cuts were more than compensated by production growth in the North Sea and the Gulf of Mexico. The relationship between Novak and Abdulaziz was strictly formal and lacked the rapport that was established between Novak and al-Falih.
In December 2019, OPEC+ agreed on the smallest possible collective production cut of 500,000 barrels per day, while Saudi Arabia pledged to reduce its production by an additional 400,000 barrels per day. In January and February 2020, amid recovering U.S. shale production, there was mounting pressure to make deeper and more extended cuts to create a sense of lasting shortage in the market. However, Russia opposed this strategy, arguing that it would effectively guarantee a price floor for U.S. shale producers, encouraging them to increase investment and production. This, in turn, would likely necessitate further production cuts from OPEC+ in the future, escalating a cycle of reductions.
In early March 2020, the disagreement turned into a conflict. Abdulaziz had to prove his effectiveness in his new role and establish his authority. He argued that the COVID-19 pandemic, then spreading in China, could decrease Chinese demand for oil. But the Russians argued that it would be better to wait for a clear picture and make cuts based on firm data rather than conflicting forecasts. For the Russians, Abdulaziz’s argument seemed like a pretense to push Saudi Arabia’s agenda, so Russia suggested abstaining from preemptive cuts, keeping the quotas for a quarter, tolerating a price drop of $5–$8 per barrel of crude oil if needed, monitoring the coronavirus situation, and taking action when and if circumstances demanded it. Saudi Arabia went on to advocate a collective cut of 1.5 million barrels per day for at least a year. When Russia refused to agree to deeper production cuts, the Saudis responded by warning that this stance would lead to the absence of any agreement on production limits, effectively signaling the onset of a price war. Despite this, the Russians remained firm in their decision and did not relent.
In anticipation of this outcome, the Saudis accumulated a large stock of oil in storage in the run-up to the potentially contentious meeting with Russia and chartered additional tankers to be able to immediately dump additional volumes of oil into the market. The next day, Saudi Arabia announced deep discounts to its posted prices for April 2020 and suggested that it could produce up to 12.5 million barrels per day, or 3 million barrels per day more than it was producing in February.
Every other oil nation followed suit and started to produce at the top of its capacity. This increase in production coincided with a drastic reduction in global oil demand due to the widespread COVID-19 lockdowns, causing a significant mismatch between supply and demand in the global oil market.
The standoff lasted for a month, with the United States acting as a broker between Saudi Arabia and Russia. Washington had to threaten to retract any military support from Saudi Arabia to push the Saudis back to the negotiation table and a deal was ultimately struck. OPEC+ agreed to unprecedented cuts, reducing their output by almost a quarter from the February 2020 levels, but it took more than a year to clear the surplus created during the price war. The COVID-19-induced price drop and inventory buildup would have happened even if the Russians had accepted Saudi Arabia’s proposed OPEC+ agreement and additional cuts likely would have been necessary, but they probably would not have been as significant or impactful.
The price war was costly. From an external perspective, it might have been a reputational loss for both Russia and Saudi Arabia, but each of them most likely counted it as a reputational win, with each country demonstrating a willingness to tolerate substantial levels of pain and not bending under pressure.
The Energy Transition: A Common Threat?
Russia and Saudi Arabia have a similar approach to the energy transition: both acknowledge that global decarbonization is necessary and that oil might become a less dominant energy source, but they believe in a gradual instead of rapid divestment from fossil fuels. This belief was particularly evident during discussions leading up to the 2021 UN Climate Change Conference (COP 26) in Glasgow, Scotland, where both Russia and Saudi Arabia expressed views that the energy transition would occur more slowly than many anticipated. Russia and Saudi Arabia indicated their readiness to continue supplying oil during the transition period to countries that might find themselves prematurely reducing dependence on fossil fuels. Both countries continue to water down international declarations calling for abandoning fossil fuels by postponing the target date and they are keen to explore technology solutions such as Carbon Capture, Utilization, and Storage, which would mitigate the environmental impact of fossil fuels while still enabling continued use. In this context, Russia and Saudi Arabia have positioned themselves as natural allies in sustaining the oil era.
After Russia’s Invasion of Ukraine
When Russia invaded Ukraine in 2022, countries of the Gulf Cooperation Council resisted U.S. pressure to condemn the invasion. While they did eventually vote for the UN resolution that condemned the war, this action was largely symbolic and did not signify a substantial commitment. For the Gulf nations, the Russia-Ukraine conflict is viewed as a distant issue, and they appear to prefer to remain neutral rather than take sides.
But their position on the issue does not mean they have no interest in its impacts. The conflict has sparked a trade war in the energy sector, as the West has had to look for alternative sources to replace embargoed Russian oil.
Western nations were contemplating embargoing Russian oil, but it would have to be replaced with oil from other sources. Despite numerous calls to Saudi Arabia, it refused to promise any additional production to alleviate potential shortages. The price cap mechanism introduced by EU and G7 countries to curb Russian oil income was also seen as a threat by Saudi Arabia and the UAE. If successful, a similar mechanism might be applied to other oil exporters, for example, under the auspices of another incarnation of the No Oil Producing and Exporting Cartels Act (NOPEC).
The UAE has emerged as an important nexus in the Russian oil trade. The country has become a base for numerous newly established oil traders who manage a shadow fleet and facilitate transactions involving oil traded above the price cap and settled in dirhams (the UAE’s currency). In recent years, the UAE has also become the residence of many rich Russians, serving as a safe haven for their luxury yachts and wealth. Dubai in particular has turned into a major transit hub for Russian travelers. Despite these developments, recent U.S. pressure has prompted the UAE to begin tightening regulations concerning the flow of Russian-related money and goods. Nevertheless, the past two years have proven extremely lucrative for the country, highlighting its strategic and economic adaptability in the face of shifting global dynamics.
Changing Camps?
In August 2023, Saudi Arabia and the UAE were among six countries that received invitations to join the intergovernmental BRICS organization, transforming what began as a seemingly arbitrary grouping of emerging markets—coined by an investment banker—into a potential counterbalance to the G7. Moscow is pushing the expansion and concept, as Russia needs to create a sphere of legitimacy and break out of its pariah state status. While the Gulf countries may not necessarily embrace this concept, they are looking for opportunities to hedge their roles as junior partners of the United States.
For decades, the Persian Gulf has been a strategic focus for the United States, partly due to America’s reliance on oil imports from the region. But in recent years, the United States has transitioned from being an oil importer to being the world’s largest exporter of liquefied natural gas, positioning itself as a formidable competitor to the Gulf countries in the global energy market. As discussed earlier in this analysis, the shift underscores a broader realignment in global energy politics that will increasingly have profound influence on the geopolitical choices of Gulf countries and Russia.
At the same time, China’s energy imports continue to grow, despite China’s leadership in wind, solar, and EVs. One might argue that China is becoming a more important partner to the Gulf countries than the United States. Saudi Arabia is linking its Vision 2030 with China’s Belt and Road Initiative (BRI). Saudia Arabia has lately become the largest recipient of BRI investments in the region.
At the same time, Russia is becoming increasingly dependent on China as the main buyer of its natural resources and the main supplier of Russia’s imports.
Currently, Russia and Saudi Arabia are in mutually beneficial cooperation mode, but this cooperation is built around a narrow agenda of the oil market stability, which may be a shaky foundation for a long-lasting relationship.
The two countries have been getting closer related to anti-Western sentiment and a desire for a multi-polar world. Both countries also seem natural players in China’s geopolitical camp—ambitious but waning regional powers with global aspirations, but limited chances to realize them. China may be most interested in luring these countries to its side and may be best positioned to placate the egos of Russian and Saudi Arabian leaders, while extracting the real benefits for Chinese national interest.
In this series on Russia in the Middle East and North Africa, Carnegie scholars and external experts analyze how Russia has used various foreign policy tools to mount a recent comeback in the region after years of absence following the collapse of the Soviet Union in 1991. Contributors to the series also examine the impacts of Russian policies on questions of peace, security, and democratic development in the Middle East and North Africa.
