Saudis Offer Russia OPEC Membership, Terror Immunity for Olympics

The Saudis are taking America's place on the world stage.

Russia's President Putin and Secretary General of Saudi Arabia's National Security Council Prince Bandar Bin Sultan meet in Moscow

The Saudis are certainly beginning to throw their weight around in a big way. It helps that America has been out to lunch since 2008. Still this time they might be biting off more than they can chew.

Russia is being offered a nice deal, but taking it will mean admitting that it's no longer a world power. Russia isn't really a world power anymore, but it can't afford to come out and say so. And letting the Saudis call the shots to this extent would do it.

Russia would be sacrificing its Shiite axis for promises of money and protection from Saudi Arabia. I don't see Putin taking that deal. Russia is corrupt and a pseudo-OPEC coordination would be a major bailout with the shale threat. And that even puts Russia and Saudi Arabia in the same boat, but the Saudis showing up and telling Russia that they can call off Chechen terror attacks is a blatant power play.

Prince Bandar, head of Saudi intelligence, allegedly confronted the Kremlin with a mix of inducements and threats in a bid to break the deadlock over Syria. “Let us examine how to put together a unified Russian-Saudi strategy on the subject of oil. The aim is to agree on the price of oil and production quantities that keep the price stable in global oil markets,” he said at the four-hour meeting with Mr Putin. They met at Mr Putin’s dacha outside Moscow three weeks ago.

The talks appear to offer an alliance between the OPEC cartel and Russia, which together produce over 40m barrels a day of oil, 45pc of global output. Such a move would alter the strategic landscape.

As-Safir said Prince Bandar pledged to safeguard Russia’s naval base in Syria if the Assad regime is toppled, but he also hinted at Chechen terrorist attacks on Russia’s Winter Olympics in Sochi if there is no accord. “I can give you a guarantee to protect the Winter Olympics next year. The Chechen groups that threaten the security of the games are controlled by us,” he allegedly said.

Prince Bandar went on to say that Chechens operating in Syria were a pressure tool that could be switched on an off. “These groups do not scare us. We use them in the face of the Syrian regime but they will have no role in Syria’s political future.”

President Putin has long been pushing for a global gas cartel, issuing the `Moscow Declaration’ last to month “defend suppliers and resist unfair pressure”. This would entail beefing up the Gas Exporting Countries Forum (GECF), a talking shop.

Mr Skrebowski said it is unclear what the Saudis can really offer the Russians on gas, beyond using leverage over Qatar and others to cut output of liquefied natural gas (LGN). “The Qataris are not going to obey Saudi orders,” he said.

Saudi Arabia could help boost oil prices by restricting its own supply. This would be a shot in the arm for Russia, which is near recession and relies on an oil price near $100 to fund the budget.

So typically for the region, the Saudis are promising things they can't deliver on. They can't really control Al Nusra, not to the extent of preserving Russia's naval base.

The Saudis fund terrorism and they may be able to spread enough money around to keep the Chechens out of the Olympics, but that's a one off that anyone can do.

And any energy arrangements will shift on a dime when it becomes convenient.

But this is significant because the Saudis are taking America's place on the world stage. It was bad enough when the House of Saud controlled American foreign policy. But now they're not even bothering to use American diplomats as intermediaries. They're acting like a world power.