Putin May Discuss Oil With Saudi Crown Prince at G-20 Next Week

(Bloomberg) -- Russian President Vladimir Putin may meet with Saudi Crown Prince Mohammad bin Salman at the Group of 20 summit next week and discuss issues including the oil market, the Kremlin said.

The talks will come just days before a crucial meeting of OPEC and its allies in Vienna, where Saudi Arabia will be trying to convince Russia to cooperate on curbing crude output next year following oil’s plunge back into a bear market. Talks between the two leaders helped secure historic production cuts in 2016 that rescued prices from a multiyear slump.

“It’s obvious, as we assume, that they’ll both be at this summit," Kremlin spokesman Dmitry Peskov told reporters Wednesday on a conference call. "So, of course, one way or another they’ll have an opportunity to talk on the sidelines” of the Nov. 30 to Dec. 1 summit in Buenos Aires, he said.

Russia and Saudi Arabia are de-facto leaders of the Organization of Petroleum Exporting Countries’ alliance with other key oil exporters. After agreeing in June to boost output to offset losses from Iran and Venezuela, the countries have so far demonstrated different positions on whether action is necessary to stem the current price rout.

While Saudi Arabia has called for broad output cuts and warned of an emerging glut, Russia has stuck to a wait-and-see approach, saying further market monitoring is needed before any decision.

A conversation between Putin and the Saudi Crown Prince could bridge the diverging views ahead. When the two leaders met at the G20 summit in Hangzhou, China in September 2016 they overcame decades of mistrust to lay the ground for the original OPEC+ deal that removed about 1.8 million barrels a day from the market and eliminated a global oil supply overhang.

Russia is closely monitoring the current oil price volatility, Peskov said. Earlier this month, Putin told reporters his country is quite comfortable with oil at around $70 per barrel. Since then, international benchmark Brent crude has dropped as low as $61.71, the least in almost a year. It traded at $63.58 a barrel at 12:30 London time on Wednesday.

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