Russian wealth fund chief points to Saudi Arabia as a precedent for repairing relations with the US

The head of Russia’s $10 billion state investment vehicle is optimistic about repairing relations with Washington, he told our reporters on Sunday, pointing to Moscow’s growing bond with Saudi Arabia as a precedent.

Russia isn’t trying to fill a void in the Middle East left by what some describe as an inward-turning America, Kirill Dmitriev, chief executive of Russia’s sovereign wealth fund (RDIF) told our reporter Hadley Gamble in Riyadh. He insisted that Russia’s growing investments in and trade with Saudi Arabia should be seen as “building bridges” rather than engaging the strategic competition that many in the West regularly warn about.

“Really we are not talking about, you know, the strategic partnerships that Saudi has with the U.S., and what we are doing is not against the U.S. It’s actually building something that is very positive,” Dmitriev said. “And building something that helps Saudi economy, Russian economy — and builds the friendship between our nations.”

The CEO’s comments come at a time of frigid relations between the U.S. and Russia, as the latter remains under U.S. sanctions and has been accused by the U.S. intelligence community of meddling in the 2016 election and posing a continued threat to the presidential election in 2020. 

Dmitriev pointed to his country’s blossoming friendship with Saudi Arabia — something that only four years ago was in serious doubt, given the animosity between the two during the Cold War. The last few years, by contrast, have seen the creation of a historic oil production alliance led by Riyadh and Moscow, increased trade and investment, and the first state visit by a Saudi monarch to Russia.

“I think we need to go back to basics… I’m sure the Saudi example is very interesting to try at some point to restore the relationship with the U.S., because if we could do it with Saudi Arabia in four years, why can’t we do it with the U.S. going forward?” he asked.

“Many people didn’t believe that we’ll make much progress,” Dmitriev said of the relationship with the Saudi kingdom. “And it seemed too distant because Russia and Saudi Arabia were worlds apart. We had lots of differences during Soviet times. We had lots of differences in many politics in the Middle East. But now I can report to you that we made really breakthrough and this is a breakthrough because President Putin and King Salman and now Crown Prince Mohammed bin Salman really believed that it’s possible to bring Russia and Saudi Arabia closer together.”

Dmitriev, as chief of RDIF, is tasked with attracting inward investment to Russia in a wide range of sectors. In previous interviews with CNBC, he has often downplayed political tensions and espoused better relations to promote trade and investment. He’s criticized U.S. sanctions on Russia, calling them unproductive. He has also vocally defended Michael Calvey, the American investor currently under house arrest in Russia on state charges of defrauding a Russian bank, allegations Calvey says are untrue.

RDIF already has investment partnerships with Saudi Arabia’s sovereign wealth funds, PIF and SAGIA. Saudi Aramco has made moves to invest in Russia’s energy industry, with the two companies agreeing on terms of an investment into Russian oilfield services firm Novomet earlier this year. The two countries also jointly invest in an energy fund through a Russian partnership with Saudi state oil giant Aramco, and are expected to announce 10 new investment projects in the oil and technology spheres on Monday.

Saudi Arabia has so far invested $2.5 billion of a $10 billion investment pledge into a number of Russian sectors, including energy, infrastructure and technology.

“This angle of Middle East-Russia-Asian markets is a very interesting angle because there are lots of growth opportunities in all those markets,” Dmitriev said. “Of course the situation in the Middle East is still quite volatile and we know about geopolitical tensions but there is no doubt that there is a major opportunity to grow the Saudi economy.”