Russia and Saudi Arabia strengthen ties amid OPEC upheaval

Jun 3, 2026

Russia and Saudi Arabia are strengthening their oil alliance following the UAE's exit from OPEC, a move that weakens the cartel. The two nations, which together account for over 20% of global oil production, are coordinating output to control supply. Underscoring the new relationship, Saudi Arabia will be the guest country at Russia's 2026 St. Petersburg International Economic Forum amid ongoing sanctions against Moscow.

Russia-Saudi oil alliance

▪Global oil demand is forecast by OPEC to grow by 1.2 million barrels per day in 2026 and 1.5 million in 2027.
▪Russia and Saudi Arabia each produce 9-10 million barrels of oil per day, collectively accounting for over 20% of global production.
▪The two countries coordinate oil output directly and through the OPEC+ alliance, which was formed in 2016.
▪Russian President Vladimir Putin met with Saudi Crown Prince Mohammed bin Salman in Riyadh in 2019 and late 2023.

UAE exit from OPEC

▪The United Arab Emirates, formerly OPEC's third-largest producer, left the organization on May 1 after nearly 60 years.
▪Before the war in Iran started, OPEC countries produced over 35% of the world's crude oil and held nearly 80% of proven reserves.
▪The UAE was reportedly unhappy with OPEC's production quotas and has significant spare capacity to increase production.
▪The UAE's departure reduces OPEC's membership to 11 countries and is expected to weaken the cartel's long-term pricing power.

Strait of Hormuz blockade impact

▪Western and other buyers have increased their purchases of sanctioned Russian oil to prevent a sharp rise in global oil prices.
▪Iran is effectively blocking the Strait of Hormuz, which benefits Russia and other non-Gulf oil exporters.

St. Petersburg Economic Forum 2026

▪Russia has designated Saudi Arabia as the guest country for the St. Petersburg International Economic Forum (SPIEF) on June 3-6, 2026.
▪The 2026 forum coincides with the 100th anniversary of the establishment of diplomatic relations between Russia and Saudi Arabia.

Saudi Vision 2030 diversification

▪Saudi Arabia's "Vision 2030" program, launched a decade ago, aims to diversify the country's economy away from oil dependency.
▪Due to Western sanctions, Russia's economy is not considered an attractive investment opportunity for Saudi Arabia at present.