Russia: Better Iran-Saudi Arabia ties will help oil prices

Jessica Morris
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There's speculation Russia and Opec could strike a deal to curb production (Source: Getty)

Russia has indicated it would like to see better relations between regional rivals Iran and Saudi Arabia, at a time when oil markets are awash with speculation of a production cut deal.

A senior official at Russia's foreign ministry, Zamir Kabulov, reportedly said that this would help oil prices, which have fallen to around $33 per barrel from over $100 in June 2014.

"We all need stability on the oil market and a return to normal (crude) prices," Kabulov was quoted by the RIA news agency.

"And these are key nations, especially Saudi Arabia and Iran, which is striving to return to the oil market, anticipating the removal of sanctions."

The global supply glut has been exacerbated by The Organization of the Petroleum Exporting Countries' (Opec) refusal to cut production despite plummeting prices. The de facto leader, Saudi Arabia, wants to defend its market share against the emerging US shale gas industry.

However, recently a number of analysts have predicted oil will remain lower for longer. They point to Iran's return to the market, as well as the US shale gas industry's so far surprising resilience to low oil prices.

Brent crude, the global benchmark, is down 0.87 per cent to $33.07 per barrel. Meanwhile West Texas Intermediate crude, the US benchmark, slipped 0.37 per cent to $29.33.

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