Saudi and Russia agree on oil issues: Saudi Prince

MOSCOW (Reuters) - Saudi Arabia and Russia, the world's biggest oil producers, have mutual understanding on the need to protect the interests of both consumers and producers of oil, Saudi Prince Bandar bin Sultan was quoted as saying on Monday.

Bandar, who heads of Saudi Arabia's National Security Council, held meetings in Moscow on Monday with President Dmitry Medvedev and Prime Minister Vladimir Putin.

"We believe it is essential to defend the interests of oil consumers and producers," Interfax news agency quoted Bandar as saying after a meeting with Putin.

"Russia and Saudi Arabia have agreements and mutual understanding on practically all questions linked with energy resources," Bandar said.

Russia is the No. 2 oil exporter after Saudi Arabia. Interfax said both countries also signed a deal on arms cooperation, but gave no details.

"Saudi Arabia strives to have varied sources of arms," Bandar was quoted as saying.

Russia in recent years has refrained from acting in line with the policies of the Organization For Oil Producing Countries (OPEC), in which Saudi Arabia is the key player.

OPEC repeatedly has declined consumer nation calls for more output, saying high prices have nothing to do with a supply shortage.

Oil prices are at record levels after surging demand from emerging nations like China and rising cash inflows into commodities from investors seeking to hedge against inflation and the weak dollar.

(Reporting by Guy Faulconbridge; Editing by David Gregorio)