Like the Gulf countries, Russia is in need of economic diversification, and strategies for achieving this formed the backdrop to recent meetings with regional leaders.

ALTHOUGH it may have lacked the razzmatazz of the US presidential visit to Saudi Arabia, there has been a lowerkey but still significant “reset” in relations between the region and Russia in recent weeks. Top policymakers from the Gulf Cooperation Council (GCC) states visited the country with the aim of improving diplomatic and trading relations strained by the conflicts in Syria and Iraq, and by the repercussions of the lower price of oil, on which the economic fortunes of both Russia and the Gulf states depend.

In April, Mohammed bin Zayed Al-Nahyan, crown prince of Abu Dhabi, met with Vladimir Putin, the Russian president, in Moscow. Although the main focus of that visit was the security situation in the Levant and Yemen — which GCC countries believe has been worsened by Russia’s alliance with Iran and its allies — it was also seen as a sign of increasingly close business ties.

Then, after the groundbreaking visit of US President Donald Trump to Saudi Arabia, Deputy Crown Prince Mohammed bin Salman called in on Putin to discuss regional security, global energy markets and other commercial aspects of the relationship.

And just this past weekend, senior Saudi and Emirati decision-makers attended the St. Petersburg International Economic Forum, the event that has become Russia’s commercial showcase for the world. The Saudi delegation included Khalid Al-Falih, minister of energy, industry and mineral resources, reinforcing the idea that commercial and business relations are toward the top of the agenda for bilateral relations between the two countries.

Given the importance of oil to both economies it is natural to assume that energy policy would have been high on the list and experts have described how Russia and the GCC countries are all chasing the same lucrative markets — principally China and India — in a new version of the 19th century “Great Game” played out between the Russians and the British.

It should also be noted that both the GCC and Russia have a common interest in confronting the challenge of the US shale oil industry, generally regarded as the biggest single drag on world energy prices.

But what kind of economy are the Middle East leaders dealing with? Russia, once the only other superpower alongside the US, was always a political and military colossus, rather than an economic one, and the years since the end of the Soviet Union have not been kind to it in this respect.

The chaos of the 1990s privatizations, the boom and bust years leading up to the global financial crisis, and the dramatic fall in oil prices in 2014, have left it with a fragile “Dutch disease” economy. Commodity exports account for more than half of exports and government revenue.

Like the GCC countries, Russia is in need of economic diversification away from oil dependency. Strategies for achieving this form the backdrop to the recent meetings with Gulf leaders.

The good news is that relative oil price stability has had a positive effect on the overall economy, which after several quarters of contraction enjoyed a recovery in the final quarter of the last year, which appears to have continued into 2017.

Growth, consumer confidence and higher employment are likely to discourage the big capital outflows that benefited the global offshore banking industry, but which did nothing to enhance domestic investment prospects.

An uptick in domestic economic activity is an encouraging sign for foreign investors, including the Gulf countries. Infrastructure investment is an urgent requirement, and there have been some notable deals in this respect.

The UAE, in particular, has been very active in Russia. Mubadala, the Abu Dhabi sovereign investment fund, has been involved in billions of dollars of investment in infrastructure and industry via the Russian Direct Investment Fund (RDIF). DP World, the Dubai ports operator, has launched a joint venture with the RDIF and is believed to be in talks to invest in a big port in Vladivostok, on the strategic Pacific coast.

In the opposite direction, there is big Russian investment in the UAE real estate and leisure sectors. Earlier this year, there was an eye-catching deal agreed to develop the next generation of Russian military jets in partnership between Russia and the UAE.

Saudi Arabia has not been left out of the dealdoing spree. Energy is naturally the main focus, much of it via Saudi Aramco, but the Kingdom’s Public Investment Fund (PIF) also has in place a $10 billion general investment program with RDIF in infrastructure and real estate.

So there is the makings of a trading relationship there. But it is still embryonic: According to Russian statistics, in the first quarter of this year, the value of trade with Saudi Arabia was $124 million, and $296 million with the UAE. Both are substantially smaller, for example than Russian’s trade with Iran, which stood at $398 million.

A full “reset” between the GCC and Russia will probably have to await the resolution of the profound geopolitical and strategic energy issues that, as ever, dominate the region. Frank Kane is an award-winning business journalist based in Dubai. He can be reached on Twitter @frankkanedubai