UAE president to meet Vladimir Putin in Russia on Tuesday

Reuters

• Meeting follows OPEC+ oil production cuts in defiance of US pressure
• Unlike Western countries, UAE has not imposed sanctions on Russia

UAE president Sheikh Mohamed bin Zayed Al Nahyan will visit Russia on Tuesday for a meeting with Russian president Vladimir Putin, amid growing escalations in the Russia-Ukraine war. 

During his visit, Sheikh Mohamed bin Zayed Al Nahyan will discuss UAE-Russia relations with Putin, along with a number of regional and international issues and developments of common interest, UAE state news agency WAM reported.

The two countries have been forging closer ties recently. On Wednesday last week, OPEC+ – which comprises a group of oil producers that includes the UAE and Russia – announced a two million barrel per day cut to its production quota from November.

• UAE stocks buoyed by oil price rally on back of OPEC+ cuts
• Russian flight prices to Dubai soar as Putin orders army call-up
• Arab banks shun Russian Mir payments system after pressure

The announcement comes despite repeated calls from US President Joe Biden’s administration for the group to pump more oil to help lower fuel prices in light of the energy crisis triggered by Russia’s invasion of Ukraine. 

The production cut is expected to further spike gasoline prices – regarded as a pivotal issue for the US mid-term elections next month. 

Energy market participants had expected OPEC+ to impose output cuts of somewhere between 500,000 and two million barrels.

“The petro-nations surprised against earlier expectations and announced a strong cut of production quotas starting next month,” Norbert Rücker, head of economics and next generation research at Julius Baer, said in a research note published last Thursday.

“The fundamental reasoning for the supply cut seems weak. The oil market is anything but in surplus or out of balance. Spare capacity has narrowed as the petro-nations removed previous curtailments. 

“The petro-nations decision seems more determined by the geopolitical environment than by market conditions. The tensions between the oil consumers and the oil producers are set to increase, bringing more uncertainty. 

“The main consequence of the quota reduction seems an increase in uncertainty. Unfortunately, today’s oil politics feel somewhat like sand-pit politics.” 

To date the Gulf states, including the UAE, have taken a neutral stance on Russia’s invasion of Ukraine. 

In contrast to Western countries, the UAE has not imposed sanctions on Russia and its central bank has so far not issued guidance regarding Western sanctions.

In September, Reuters reported that Bank of America was relocating some of its Russia-based bankers to Dubai, as part of a move by several Western banks this year to relocate staff in the wake of the ongoing Russia-Ukraine war.