Crown Prince Abdullah's visit to Moscow

This week the Saudi Crown Prince Abdullah lands in Moscow to sign a historic energy pact and to forge a new relationship with the kingdom's main rival as top oil producer. He will be accompanied by Saudi Oil Minister Ali Al Naimi.

It has to be said that Mr. Al Naimi is gaining considerable weight in many circles. Independent observers credit him with keeping the oil price at least $1 per barrel higher in recent years than it would have been without him.

High oil prices of the past three years leave Mr. Al Naimi with a personal prestige perhaps unrivalled since Sheikh Yamani in the 1970s. Now the winning of new friends and influence in Russia is on the agenda.

In order to keep Opec oil prices towards the top of their $22-28 per barrel range then more than a little cooperation from Russia will be required.

Pragmatic Russia may heed this call from Saudi Arabia. Russia pays around $7 per barrel in oil production costs, compared with Saudi' $1-2 a barrel, and would be financially crippled if oil prices fell to $10 per barrel as they did in 1998.

But no sign of that today, as mounting resistance to US rule in Iraq is keeping world oil supplies tight. Indeed, if the tentative US economic recovery blossoms this autumn, oil prices could head much higher.

History never quite repeats itself, but the situation in today's financial and commodity markets does bare more than a passing resemblance to the mid-1970s.

For readers of this column who have business interests in the Middle East, and that is the AME Info target audience, this is very good news. The late 1970s were a golden age in the Middle East and we are seeing a repetition of this scenario.

Conversely for Western markets this means inflation, a property crash, possibly another stock market crash and anemic growth.

Now it is possible that the many manifest geopolitical problems of the Middle East serve to undermine such a golden scenario. But there is nothing that says economic expansion can not happen under unstable conditions.

Both the economic miracles of Germany and Japan occurred under similar conditions and with the United States running the show in occupied lands. For the inflow of funds into Iraq may combine with a huge flow of oil revenues into the region.

Welcome to autumn 2003 in the Middle East. Painful instability and terrorism aside, this is now one of the fastest growing regions in the world, and the more secure the oil price the better all round.