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Mastermind: How Putin got Saudi Arabia and Iran to agree on an Opec deal

Russian President Vladimir Putin was the mediator who played a crucial role

Reuters  |  VIENNA 

File photo of Vladimir Putin
File photo of Vladimir Putin

 Russian President played a crucial role in helping rivals and set aside differences to forge the cartel's first with non-in 15 years.

Interventions ahead of Wednesday's meeting came at key moments from Putin, Saudi Deputy Crown Prince Mohammed bin Salman and Iran's Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani, and non-sources said.

Putin's role as intermediary between Riyadh and Tehran was pivotal, testament to the rising influence of in the Middle East since its military intervention in the Syrian civil war just over a year ago.

It started when Putin met Saudi Prince Mohammed in September on the sidelines of a G20 gathering in China.

The two agreed to cooperate to help world oil markets clear a glut that had more than halved oil prices since 2014, pummelling Russian and Saudi government revenues. Oil prices are up 10 pct this week topping $53 a barrel.

The financial pain made a possible despite the huge political differences between and Saudi over the civil war in Syria.

"Putin wants the deal. Full stop. Russian companies will have to cut production," said a Russian energy source briefed on the discussions.

In September, agreed in principle at a meeting in Algiers to reduce output for the first time since the 2008 financial crisis.

But the individual country commitments required to finalise a at Wednesday's Vienna meeting still required much diplomacy.

Recent meetings have failed because of arguments between de facto leader and third-largest producer Iran. Tehran has long argued should not prevent it restoring output lost during years of Western sanctions.

Proxy wars in Syria and Yemen have exacerbated decades of tensions between the Saudi Sunni kingdom and the Iranian Shi'ite islamic republic.

BRINKMANSHIP

Heading into the meeting, the signs were not good. Oil markets went into reverse. Saudi Prince Mohammed had repeatedly demanded participate in supply cuts. Saudi and Iranian negotiators had argued in circles in the run-up to the meeting.

And, then, just a few days beforehand, Riyadh appeared back away from a deal, threatening to boost production if failed to contribute cuts.

But Putin established that the Saudis would shoulder the lion's share of cuts, as long as Riyadh wasn't seen to be making too large a concession to Iran. A was possible if didn't celebrate victory over the Saudis.

A phone call between Putin and Iranian President Rouhani smoothed the way. After the call, Rouhani and oil minister Bijan Zanganeh went to their supreme leader for approval, a source close to the Ayatollah said.

"During the meeting, the leader Khamenei underlined the importance of sticking to Iran's red line, which was not yielding to political pressures and not to accept any cut in Vienna," the source said.

"Zanganeh thoroughly explained his strategy ... and got the leader's approval. Also it was agreed that political lobbying was important, especially with Mr. Putin, and again the Leader approved it," said the source.

On Wednesday, the Saudis agreed to cut production heavily, taking "a big hit" in the words of energy minister Khalid al-Falih - while was allowed to slightly boost output.

Iran's Zanganeh kept a low profile during the meeting, delegates said. Zanganeh had already agreed the the night before, with Algeria helping mediate, and he was careful not to make a fuss about it.

After the meeting, the usually combative Zanganeh avoided any comment that might be read as claiming victory over Riyadh.

"We were firm," he told state television. "The call between Rouhani and Putin played a major role ... After the call, backed the cut."

IRAQ LAST-MINUTE HITCH

But would not be without a last-minute quarrel threatening to derail the deal. Iraq became a problem.

As ministerial talks got underway, OPEC's second-largest producer insisted it could not afford to cut output, given the cost of its war against Islamic State.

But, facing pressure from the rest of to contribute a cut, Iraqi Oil Minister Jabar Ali al-Luaibi picked up the phone in front of his peers to call his prime minister, Haider al-Abadi.

"Abadi said: 'Get the done'. And that was it," one source said.

 

 

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Mastermind: How Putin got Saudi Arabia and Iran to agree on an Opec deal

Russian President Vladimir Putin was the mediator who played a crucial role

Russian President Vladimir Putin was the mediator who played a crucial role

 Russian President played a crucial role in helping rivals and set aside differences to forge the cartel's first with non-in 15 years.

Interventions ahead of Wednesday's meeting came at key moments from Putin, Saudi Deputy Crown Prince Mohammed bin Salman and Iran's Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani, and non-sources said.

Putin's role as intermediary between Riyadh and Tehran was pivotal, testament to the rising influence of in the Middle East since its military intervention in the Syrian civil war just over a year ago.

It started when Putin met Saudi Prince Mohammed in September on the sidelines of a G20 gathering in China.

The two agreed to cooperate to help world oil markets clear a glut that had more than halved oil prices since 2014, pummelling Russian and Saudi government revenues. Oil prices are up 10 pct this week topping $53 a barrel.

The financial pain made a possible despite the huge political differences between and Saudi over the civil war in Syria.

"Putin wants the deal. Full stop. Russian companies will have to cut production," said a Russian energy source briefed on the discussions.

In September, agreed in principle at a meeting in Algiers to reduce output for the first time since the 2008 financial crisis.

But the individual country commitments required to finalise a at Wednesday's Vienna meeting still required much diplomacy.

Recent meetings have failed because of arguments between de facto leader and third-largest producer Iran. Tehran has long argued should not prevent it restoring output lost during years of Western sanctions.

Proxy wars in Syria and Yemen have exacerbated decades of tensions between the Saudi Sunni kingdom and the Iranian Shi'ite islamic republic.

BRINKMANSHIP

Heading into the meeting, the signs were not good. Oil markets went into reverse. Saudi Prince Mohammed had repeatedly demanded participate in supply cuts. Saudi and Iranian negotiators had argued in circles in the run-up to the meeting.

And, then, just a few days beforehand, Riyadh appeared back away from a deal, threatening to boost production if failed to contribute cuts.

But Putin established that the Saudis would shoulder the lion's share of cuts, as long as Riyadh wasn't seen to be making too large a concession to Iran. A was possible if didn't celebrate victory over the Saudis.

A phone call between Putin and Iranian President Rouhani smoothed the way. After the call, Rouhani and oil minister Bijan Zanganeh went to their supreme leader for approval, a source close to the Ayatollah said.

"During the meeting, the leader Khamenei underlined the importance of sticking to Iran's red line, which was not yielding to political pressures and not to accept any cut in Vienna," the source said.

"Zanganeh thoroughly explained his strategy ... and got the leader's approval. Also it was agreed that political lobbying was important, especially with Mr. Putin, and again the Leader approved it," said the source.

On Wednesday, the Saudis agreed to cut production heavily, taking "a big hit" in the words of energy minister Khalid al-Falih - while was allowed to slightly boost output.

Iran's Zanganeh kept a low profile during the meeting, delegates said. Zanganeh had already agreed the the night before, with Algeria helping mediate, and he was careful not to make a fuss about it.

After the meeting, the usually combative Zanganeh avoided any comment that might be read as claiming victory over Riyadh.

"We were firm," he told state television. "The call between Rouhani and Putin played a major role ... After the call, backed the cut."

IRAQ LAST-MINUTE HITCH

But would not be without a last-minute quarrel threatening to derail the deal. Iraq became a problem.

As ministerial talks got underway, OPEC's second-largest producer insisted it could not afford to cut output, given the cost of its war against Islamic State.

But, facing pressure from the rest of to contribute a cut, Iraqi Oil Minister Jabar Ali al-Luaibi picked up the phone in front of his peers to call his prime minister, Haider al-Abadi.

"Abadi said: 'Get the done'. And that was it," one source said.

 

 

image
Business Standard
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Mastermind: How Putin got Saudi Arabia and Iran to agree on an Opec deal

Russian President Vladimir Putin was the mediator who played a crucial role

 Russian President played a crucial role in helping rivals and set aside differences to forge the cartel's first with non-in 15 years.

Interventions ahead of Wednesday's meeting came at key moments from Putin, Saudi Deputy Crown Prince Mohammed bin Salman and Iran's Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani, and non-sources said.

Putin's role as intermediary between Riyadh and Tehran was pivotal, testament to the rising influence of in the Middle East since its military intervention in the Syrian civil war just over a year ago.

It started when Putin met Saudi Prince Mohammed in September on the sidelines of a G20 gathering in China.

The two agreed to cooperate to help world oil markets clear a glut that had more than halved oil prices since 2014, pummelling Russian and Saudi government revenues. Oil prices are up 10 pct this week topping $53 a barrel.

The financial pain made a possible despite the huge political differences between and Saudi over the civil war in Syria.

"Putin wants the deal. Full stop. Russian companies will have to cut production," said a Russian energy source briefed on the discussions.

In September, agreed in principle at a meeting in Algiers to reduce output for the first time since the 2008 financial crisis.

But the individual country commitments required to finalise a at Wednesday's Vienna meeting still required much diplomacy.

Recent meetings have failed because of arguments between de facto leader and third-largest producer Iran. Tehran has long argued should not prevent it restoring output lost during years of Western sanctions.

Proxy wars in Syria and Yemen have exacerbated decades of tensions between the Saudi Sunni kingdom and the Iranian Shi'ite islamic republic.

BRINKMANSHIP

Heading into the meeting, the signs were not good. Oil markets went into reverse. Saudi Prince Mohammed had repeatedly demanded participate in supply cuts. Saudi and Iranian negotiators had argued in circles in the run-up to the meeting.

And, then, just a few days beforehand, Riyadh appeared back away from a deal, threatening to boost production if failed to contribute cuts.

But Putin established that the Saudis would shoulder the lion's share of cuts, as long as Riyadh wasn't seen to be making too large a concession to Iran. A was possible if didn't celebrate victory over the Saudis.

A phone call between Putin and Iranian President Rouhani smoothed the way. After the call, Rouhani and oil minister Bijan Zanganeh went to their supreme leader for approval, a source close to the Ayatollah said.

"During the meeting, the leader Khamenei underlined the importance of sticking to Iran's red line, which was not yielding to political pressures and not to accept any cut in Vienna," the source said.

"Zanganeh thoroughly explained his strategy ... and got the leader's approval. Also it was agreed that political lobbying was important, especially with Mr. Putin, and again the Leader approved it," said the source.

On Wednesday, the Saudis agreed to cut production heavily, taking "a big hit" in the words of energy minister Khalid al-Falih - while was allowed to slightly boost output.

Iran's Zanganeh kept a low profile during the meeting, delegates said. Zanganeh had already agreed the the night before, with Algeria helping mediate, and he was careful not to make a fuss about it.

After the meeting, the usually combative Zanganeh avoided any comment that might be read as claiming victory over Riyadh.

"We were firm," he told state television. "The call between Rouhani and Putin played a major role ... After the call, backed the cut."

IRAQ LAST-MINUTE HITCH

But would not be without a last-minute quarrel threatening to derail the deal. Iraq became a problem.

As ministerial talks got underway, OPEC's second-largest producer insisted it could not afford to cut output, given the cost of its war against Islamic State.

But, facing pressure from the rest of to contribute a cut, Iraqi Oil Minister Jabar Ali al-Luaibi picked up the phone in front of his peers to call his prime minister, Haider al-Abadi.

"Abadi said: 'Get the done'. And that was it," one source said.

 

 

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