The Sydney Morning Herald is reporting a blockbuster deal being offered by the Saudis to the Russians that could hand Moscow control of global oil markets.
Saudi Arabia has secretly offered Russia a sweeping deal to control the global oil market and safeguard Russia’s gas contracts, if the Kremlin backs away from the Assad regime in Syria.
The revelations come amid high tension in the Middle East, with US, British, and French warships poised for missile strikes against Syria, and Iran threatening to retaliate. The strategic jitters pushed Brent crude prices to a five-month high of $US112 a barrel.
The talks appear to offer an alliance between the OPEC cartel and Russia, which together produce more than 40 million barrels a day of oil, 45 per cent of global output. Such a move would alter the strategic landscape.
‘‘Let us examine how to put together a unified Russian-Saudi strategy on the subject of oil. The aim is to agree on the price of oil and production quantities that keep the price stable in global oil markets,’’ he is claimed to have said at the four-hour meeting with Mr Putin.
Saudi Arabia could help boost oil prices by restricting its own supply. This would be a shot in the arm for Russia, but it would be a dangerous strategy if it pushed prices to levels that put the global economic recovery at risk. Mr Skrebowski said trouble is brewing in supply states.
‘Libya is reverting to war lordism. Nigeria is drifting into a bandit state with steady loss of output. And Iraq is going back to the sort of Sunni-Shia civil war we saw in 2006-07,’’ he said.
The Putin-Bandar meeting took place three weeks ago. Mr Putin was unmoved by the Saudi offer.
‘‘We believe that the Syrian regime is the best speaker on behalf of the Syrian people, and not those liver eaters,’’ he said, referring to footage showing a Jihadist rebel eating the heart and liver of a Syrian soldier.
Prince Bandar said that there can be ‘‘no escape from the military option’’ if Russia declines the olive branch. Events are unfolding exactly as he foretold.
Saudis offer Russia secret oil deal if it drops Syria
