Russian President Vladimir Putin is in Saudi Arabia seeking to capitalize on his country's growing influence in the Middle East. Both parties stand to gain a lot.
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Russian President Vladimir Putin arrived in Saudi Arabia on Monday for his first visit to the kingdom in over a decade. Putin is seeking trade and investment opportunities in the region, where Russian influence has grown in recent years.
Saudi Arabia and neighbor the United Arab Emirates (UAE) are likewise interested in Russian ventures that could help the Arab countries diversify their oil-dependent economies. Putin will visit the UAE on Tuesday.
New investments are essential for the Russian economy, which continues to suffer under sanctions related to the country's military action in Ukraine and the low price of Russian oil, a key export. It is likely that Russia will not meet its economic growth goals for 2019.
Russia's sovereign wealth fund is expected to come away from the visit with deals worth more than $2 billion. Saudi Arabia, meanwhile, is after assistance in launching a satellite.
Prices for crude oil are reaching new lows almost daily due to oversupply and unease over the global economy. Some countries have been hit harder than others.
Image: picture-alliance/dpa/W. Hong
A great, big hangover
Even Norway isn't immune to the falling price of oil. For years, the wealthy Scandinavian nation had fueled its rapid growth with the oil it pumped out of the North Sea. But what once transformed a poor agrarian state into one of the richest countries in the world now has policymakers wondering if it wouldn't be wiser to allocate more resources to Norway's fishing industry.
Image: picture-alliance/dpa/O. Hagen
Double trouble
For Russia, the falling price of oil has added insult to injury as its economy is already reeling under Western sanctions. In 2015, economic output in the country shrunk by around 4 percent. As a result, salaries have dropped and the ruble has lost half of its value against the dollar. The news service Bloomberg estimates that 2016 will be another recessionary year for Russia.
Image: Getty Images/AFP/A. Druzhinin
An uncertain future
Nigeria is Africa's largest producer of oil. Before being elected president, Muhammadu Buhari announced that he would increase government spending - but the drop in the price of oil may make that promise impossible to fulfill. The World Bank estimates that three-quarters of the Nigerian state's revenues come from the oil business. Many infrastructure projects are currently on hold.
Image: picture-alliance/dpa
New realities
Nigeria's not the only country that calculates its budget based on the price of oil staying high. The result has been a big gap between expected and actual revenues. The price for a barrel of oil has dropped by nearly 75 percent since mid-2014. Many experts currently have little reason to believe the per-barrel price will return to its old level of $120 (110.76 euros) anytime soon.
After sanctions
Now that sanctions against Iranian exporters have been lifted, the Islamic Republic plans to ramp up its oil production by half a million barrels a day - putting further pressure on an already oversupplied energy market. Iran, for its part, blames its archrival Saudi Arabia for falling oil prices.
Image: picture-alliance/dpa/A. Taherkenareh
Less giving, more taking
Saudi Arabia has refused to curb oil output in order to protect its market share from competition from the US fracking industry and Iran. But now, even the world's largest oil exporter is starting to get a taste of its own medicine. The International Monetary Fund is warning about a massive impending budget deficit. The Saudis want to introduce taxes and slash energy and food subsidies.
Image: picture-alliance/dpa/P. Grimm
How long will reserves last?
Like their Saudi counterparts, other oil-rich Gulf statessuch as Qatar, Oman and the United Arab Emirates are also watching their energy reserves dwindle. These regional powers all boast large sovereign wealth funds - but altogether, the six Gulf states have already accumulated a budget deficit worth $260 billion (239.8 billion euros), according to estimates by JP Morgan Chase.
Image: M. Naamani//AFP/Getty Images
Winds of change in Venezuela?
Venezuela has the largest oil reserves in the world. For years, the country's socialist government used revenues from the sale of oil to fund its lavish social programs. Now, President Nicolas Maduro has declared a state of emergency for the Venezuelan economy. Popular support for the successor to Hugo Chavez has been slipping for about a year - about as quickly as the price of oil has dropped.
Image: Reuters
What now?
Thanks to a boost in shale gas extraction, aka fracking, the US is now the world's largest energy producer. Low oil prices, however, have made fracking widely unprofitable. The US is also one of the largest consumers of energy in the world. While motorists may celebrate having to spend less money at the pump, bigger, gas-guzzling vehicles are gaining in popularity - bad news for the environment.
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Seeking to mediate between Saudis and Iran
Russia and Saudi Arabia, a long-standing ally of Washington, have enjoyed a notable rapprochement in recent years, marked in particular by King Salman's first visit to Russia in October 2017.
Putin's tour is seen as a chance for Russia to deepen cooperation on energy and oil and to drum up investment from the Saudis, but also to underline Russia's growing influence and interest in the Middle East.
The national flags of both countries lined the streets of Riyadh as the one-day visit got underway. Putin was accompanied for the trip by his energy minister and the head of Russia's sovereign wealth fund.
Speaking ahead of the trip, in an interview with Saudi-owned Al Arabiya television, Putin expressed a wish to ease tensions between Tehran and Riyadh.
Russia has been successful in strengthening relations with both Sunni Muslim Saudi Arabia and its Shiite rival Iran. Moscow has also accrued power in the Middle East by sending troops to Syria, where it backs President Bashar Assad in the country's civil war.
The Russian president said he enjoyed "very friendly personal relations" with Saudi Crown Prince Mohammed bin Salman. He said Russia was also mulling investments in Saudi Arabia.
No 'negative impact' on US ties
It's unclear whether there will be movement on Saudi plans to buy the Russian S-400 surface-to-air missile system — a development that could stir up more unease in Washington.
The Saudis, along with the US, blamed Iran for drone and missile strikes in September. Those attacks rattled oil markets and exposed weaknesses in Saudi air defense systems.
When asked about concerns in the US that Riyadh was cozying up to Moscow, Saudi Minister of State for Foreign Affairs Adel al-Jubeir said he saw no issue.
"We don't believe that having close ties with Russia has any negative impact on our relationship with the United States," he told reporters on Sunday. "We believe that we can have strategic and strong ties with the United States while we develop our ties with Russia."