How ISIS attacks could affect Saudi oil production

Euro touches 6 1/2 month low after attacks
Euro touches 6 1/2 month low after attacks

Market watchers should be looking for any indication that Saudi Arabia will stop "punishing" Russia and Iran in oil markets if last week's terror attacks on Paris lead to a deal to stabilize Syria, Again Capital founding partner John Kilduff said Monday.

Saudi Arabia has led OPEC in a policy of keeping oil production steady despite a global glut that has sent crude prices spiraling more than 60 percent since last year. In the past, OPEC has cut output to prop up prices, but its members have opted to defend market share, putting pressure on other oil-dependent economies, such as Russia's.

At the same time, Saudi Arabia has been at loggerheads with Russia and Iran, who back Syrian President Bashar Assad in his country's civil war. The Saudis are aligned with U.S.-backed rebels.

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But Kilduff said Friday's Paris attacks, as well as the downing of a Russian airliner in Egypt and bombings in Lebanon, could move the parties together in an attempt to stabilize Syria. The Syria-based militant group that calls itself Islamic State and has set up a self-declared caliphate in that country and parts of Iraq has claimed responsibility for all three attacks.

"Does this sort of end the Saudi punishment of Russia and some of the others in the region because they come together finally over this to sort of strike a solution for Syria?" Kilduff asked on CNBC's "Squawk Box."

"The Saudis have been punishing Russia and Iran in particular because they were backing Assad. If that ends, if they all come together and cut a deal, this could end the Saudi overproduction to a degree," he said.

Kilduff told CNBC he does not see that scenario playing out, but said it warrants watching.

Billionaire investor Wilbur Ross also told "Squawk Box" on Monday he believed that outcome was "a very unlikely event."