Saudi Arabia

Reduced Saudi oil imports lead U.S. oil inventories lower

26 Jul 2017   Saudi Arabia, USA

The Khurais oil field in Saudi Arabia. Continued low imports to the United States of Saudi crude oil is a factor in the decline in U.S. oil inventories. File Photo by Ali Haider/EPA July 25 (UPI) — Low imports of crude oil from Saudi Arabia, coupled with firm domestic petroleum demand, will likely reduce U.S. oil inventories, analysts said Tuesday. U.S. commercial oil inventories are expected to fall in the week ending July 21, analysts surveyed by S&P Global Platts said in a report. U.S. crude oil stock has fallen nearly 19 million barrels in the past three weeks, as excess surplus is reduced. The supply, as of July 14, was 26 percent higher than the five-year average, but lower than the 37 percent surplus above the five-year average seen at the start of 2017. Sabotage was reported in Nigerian crude oil production on Tuesday, which came after Nigeria […]

China, India oil imports show Saudi Arabia is already carrying the burden of cuts:

26 Jul 2017   OPEC, Saudi Arabia

Saudi Arabia wants to do more to boost crude oil prices by taking a razor to its exports, but the kingdom is already doing much of the heavy lifting in Asia, where it is surrendering market share in the world’s top importing region. Saudi Energy Minister Khalid al-Falih said after a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies on Monday that his country would limit crude oil exports to 6.6 million barrels per day (bpd) in August, almost 1 million bpd below levels a year ago. This commitment is belated recognition that OPEC and its non-OPEC allies, including Russia, have to do more than just comply with their November agreement to cut output by a combined 1.8 million bpd. For the output restrictions to work by draining global oil inventories, the producers will also have to curb exports. Vessel-tracking […]

No Winners in Gulf Feud as Saudi, Qatari Assets Converge on Oil

24 Jul 2017   Qatar, Saudi Arabia
No Winners in Gulf Feud as Saudi, Qatari Assets Converge on Oil

 

Investors aren’t taking sides in the biggest political crisis in the Gulf in decades because their focus has already returned to oil.  Seven weeks after Saudi Arabia led a coalition of Arab states in cutting ties with Qatar over allegations that it supports terrorism, holders of both countries’ stocks and bonds are paying almost identical risk premiums. Their five-year credit default swaps converged for the first time in two years, stocks are valued at about 13.7 times’ projected earnings over the next 12 months, and their international bonds were almost level on Monday.

The Gulf dispute remains in stalemate after Qatar denied the charges and rejected the Saudi bloc’s demands, which include rolling back ties with Iran and shutting the Al Jazeera news channel. Meanwhile, the feud is taking a back seat to oil for investors, said analysts including Saad Siddiqui at JPMorgan Chase & Co. The price of crude is languishing under $50 a barrel, far below the level many Gulf producers need to balance their budgets.

IMF Sees 2017 Saudi Growth ‘Close to Zero’ on Oil Prices, Cuts

24 Jul 2017   Saudi Arabia

Saudi Arabia’s economy will stall this year with growth “close to zero” due to lower oil revenue, the International Monetary Fund said.  The fund lowered its 2017 growth forecast to 0.1 percent from 0.4 percent, citing OPEC production cuts, uncertainty over oil prices and the structural reforms the country is undertaking to reduce its reliance on crude, it said in a statement on Friday concluding its Article IV consultation. The IMF also lowered its non-oil growth projection to 1.7 percent from 2.1 percent — compared with actual growth of 0.2 percent in 2016.  Lower oil prices and austerity measures are weighing on Saudi Arabia’s economy, which contracted in the first quarter for the first time since 2009 — illustrating the scale of the challenge facing the country’s new heir, Crown Prince Mohammed bin Salman, as he implements his blueprint for a transition away from oil dependency. Even so, the fund said it welcomed the government’s direction, which it said would help the fiscal deficit “narrow substantially in the coming years.”  “Non‑oil growth is expected to pick up this year and overall growth is expected to strengthen over the medium term as structural reforms are implemented,” the IMF board said in the statement released on Friday. It cautioned the government to monitor the impact of the fiscal measures and to “make corrections if needed.”

Saudi Arabia Turns Off the U.S. Oil Tap

24 Jul 2017   Saudi Arabia

At last, Saudi Arabia seems to be doing what it takes to reduce the world’s most visible oil glut: the one in the U.S. Unfortunately, its renewed vigor comes as OPEC’s deal to reduce excess crude stockpiles starts to show signs of unraveling elsewhere, a subject that will be wrestled with by the group’s oil ministers as they and other producer nations meet in St Petersburg on Monday. Data published last week by the U.S. Energy Information Administration show that imports from Saudi Arabia in the week to July 14 fell to their lowest for seven years: just 524,000 barrels a day. For sure, one week’s number doesn’t mean much on its own, particularly when a single very large crude tanker could raise or lower that figure by half. But this isn’t an isolated figure. The EIA data show a clear drop in deliveries from Saudi Arabia since the […]

Saudi source gives more detail on crown prince’s dismissal

22 Jul 2017   Saudi Arabia

A source close to Saudi Arabia’s rulers has given further details of how Mohammed bin Nayef, the former crown prince, was summarily removed from his post last month.  MbN, as he is known, was dismissed by the royal family “in the higher interests of the state” because he was incapacitated by morphine and cocaine addiction, often falling asleep at public events after he became crown prince in 2015, the source told Reuters in an interview.  His addiction was a legacy of an Al Qaeda assassination attempt in 2009 that left shrapnel in his body.  “MbN has a lot of respect among us as a crown prince and as interior minister but there are higher interests for the state which are more important than social position or status,” the source told Reuters.

Reuters was unable to reach MbN for comment. Sources close to him said he would not comment and has remained in his palace in Jeddah since he was removed in June. The sources acknowledged MbN’s addiction to morphine but said it was used as a pretext to speed up the elevation of Mohammed bin Salman, the king’s 32-year-old son, to be next in line to the throne.  Reuters was unable to confirm independently the specific drugs MbN used to treat his health problems.  The source, who has knowledge of palace thinking, expanded on an account by Reuters earlier this week saying MbN was pushed aside because of his drug addiction.  The drive to remove MbN came from the king and the Allegiance Council, the 34-member body of senior princes supposed to approve and monitor the king and his anointed successors, the source said.  He denied that MbN was the victim of a palace coup by King Salman’s ambitious young son, known as MbS, in a hurry to clear his path to the throne while his ailing 81-year-old father still occupies it.

Saudi Arabia security agencies revamp sparks further intrigue

22 Jul 2017   Saudi Arabia

Saudi Arabia’s King Salman bin Abdulaziz has overhauled the kingdom’s security agencies, further concentrating power in the hands of the king and his son, the youthful crown prince Mohammed Bin Salman. The move comes a few weeks after the king appointed his son crown prince, removing his nephew and longtime interior minister Mohammed bin Nayef. It hints at continued turmoil and intrigue in the House of Saud in the wake of reports that Mohammed bin Nayef has been kept under house arrest. A series of royal decrees on Thursday night announced the creation of a presidency of state security to be headed by veteran General Abdulaziz al-Howairini. The new agency, which includes units for special forces as well as counterterrorism and anti-terror financing, will be linked to the office of the prime minister, a position held by the king. The decrees, published by the official Saudi Press Agency, said these steps were taken “to cope with the new developments and confront all security challenges with the most needed flexibility”. The government said the changes are based on a May 2012 proposal by the late Prince Nayef bin Abdulaziz. US intelligence and national security officials for long considered him, and later his son Mohammed Bin Nayef, as key partners in the war on terrorism. Mohammed Bin Nayef had been credited with crushing al-Qaeda in Saudi Arabia after the militant group targeted the kingdom with a series of attacks between 2003 and 2006 that aimed to destabilise the country. Retaining Gen Howairini is probably intended to maintain some continuity, said Jane Kinninmont, a senior research fellow at Chatham House. “That may, in part, be a response to US concerns, but it may equally be intended to preserve expertise that the country itself will find useful in the fight against terrorism,” she said.

IMF: Saudi’s Oil GDP To Fall 2% On Back Of OPEC Cuts

22 Jul 2017   Saudi Arabia

The International Monetary Fund expects Saudi Arabia’s oil gross domestic product (GDP) to fall by 1.9 percent this year as the OPEC leader commits to implementing the bloc’s production cuts. The oil production cuts are affecting overall real GDP growth as well, which the IMP expects to be “close to zero”. Non-oil GDP growth will hover around 1.7 percent and accelerate in the medium term as structural reforms promised in the Vision 2030 agenda began to take shape. “Fiscal consolidation efforts are beginning to bear fruit, progress with reforms to improve the business environment are gaining momentum, and a framework to increase the transparency and accountability of government is largely in place,” the IMF report read. “Effective prioritization, sequencing, and coordination of the reforms is essential, and they need to be well-communicated and equitable to gain social buy-in and ensure their success.” The success of Crown Prince Mohammed bin […]

Saudi King Salman orders arrest of royal prince for assault

21 Jul 2017   Saudi Arabia

Authorities on Thursday announced an order from Saudi Arabia’s King Salman bin Abdulaziz to arrest a royal prince, on charges he assaulted at least four residents of Riyadh. Salman issued an immediate arrest warrant for Prince Saud bin Abdulaziz bin Musaed bin Saud bin Abdulaziz Al Saud, and anyone else who took part with him in the purported abuses. The king also ordered both the victims and the accused to give recorded testimony. Salman’s order will keep Prince Saud in prison until a ruling is issued following trial. The king’s order also said the government is taking steps to prevent deviant behavior, to maintain security and to […]

Saudi king creates new security agency separate from interior ministry

21 Jul 2017   Saudi Arabia

Saudi King Salman on Thursday ordered the creation of a new cabinet-level security apparatus to handle a range of matters including counter-terrorism that were previously under the aegis of the Interior Ministry. In a series of royal decrees published by the state news agency, the king appointed Abdulaziz bin Mohammed al-Howairini to head the new body. The decrees also saw the appointment of Mohammed el Kuwaiz as head of the Saudi Arabian Capital Markets Authority (CMA).

Saudi Arabia empties domestic crude tanks:

20 Jul 2017   Saudi Arabia

Saudi Arabia has been progressively reducing its bloated domestic stocks of crude in a sign the global oil market is rebalancing, albeit more slowly than OPEC anticipated. Saudi Arabia’s domestic crude stocks declined in 16 of the 19 months between November 2015 and May 2017 according to government data reported to the Joint Organisations Data Initiative (tmsnrt.rs/2uIi9dC). Domestic stocks fell to just 259 million barrels at the end of May 2017, which was the lowest level since January 2012, according to updated figures published on Tuesday. Stocks were down by 30 million barrels compared with the same month a year earlier and are now down by 71 million barrels from their peak in October 2015 (tmsnrt.rs/2ua1nmg). Like other producers, Saudi Arabia holds stocks for a range of reasons, including the need to cover field maintenance and manage seasonal changes in consumption and exports. Operational stocks are […]

Saudi Crude Inventories Continue To Decline

20 Jul 2017   Saudi Arabia

The news comes as the KSA pressures the United States and Asian countries to lower their domestic inventories and buy new crude supplies, ending the current glut that is keeping oil prices low. At the end of the period, the Kingdom’s supplies fell to 259 million barrels total – a record low since January 2012. The figure also stands 71 million barrels below a peak in October 2015. Despite seasonality in the KSA’s domestic oil demand related to heating and refinery maintenance schedules, a downward trend since late 2015 is apparent in the data. The latest word from the OPEC rumor mill is that de facto bloc leader Saudi Arabia is planning more oil export cuts, causing oil prices to jump earlier this week. Oil futures jumped up two percent in value after industry consultant Petroleum Policy Intelligence said the KSA had been considering lowering exports by […]

How a Saudi Prince Unseated His Cousin to Become the Kingdom’s Heir Apparent

20 Jul 2017   Saudi Arabia

After a wakeful night confined to a Mecca palace lounge, Saudi Arabian Crown Prince Mohammed bin Nayef emerged into a marble-walled room the morning of June 21. The 57-year-old prince found a waiting crowd, cameras, a security guard with his hand on a gun—and his cousin Mohammed bin Salman, 31, the favored son of King Salman, newly installed as his successor as heir apparent and crown prince. An inside…

Addiction and intrigue: Inside the Saudi palace coup

20 Jul 2017   Saudi Arabia

On Tuesday June 21 Mohammed bin Nayef, a powerful figure in Saudi Arabia’s security apparatus for the past two decades and the next in line to the throne, was summoned to meet King Salman bin Abdulaziz on the fourth floor of the royal palace in Mecca. There, according to a source close to MbN, as he is known, the king ordered him to step aside in favor of the king’s favorite son, Mohammed bin Salman. The reason: an addiction to painkilling drugs was clouding MbN’s judgment. “The king came to meet MbN and they were alone in the room. He told him: ‘I want you to step down, you didn’t listen to the advice to get treatment for your addiction which dangerously affects your decisions’,” said the source close to MbN. The new details about the extraordinary meeting between the king and MbN that touched off the […]

Saudis Consider Further Cuts To Oil Exports

19 Jul 2017   Saudi Arabia

Tuesday . Oil futures jumped up two percent in value after industry consultant Petroleum Policy Intelligence said the KSA had been considering lowering exports by a further 1 million barrels per day. New production from Libya and Nigeria, two African countries that have been granted an exemption from production quotas due to their previously weak oil output, have brought hundreds of thousands of barrels online in the past few weeks. Sources close to the Libyan oil sector said the country had reached 1.1 million bpd national output, according to World Oil. The country is set to participate in an OPEC technical meeting on July 22 nd to discuss the “factors enabling and constraining Libya’s production recovery,” National Oil Company chairman Mustafa Sanalla said Tuesday. “We think they are looking at options to speed up the rebalancing,” PPI founder Bill Farren-Price said of the KSA in the new report. No […]

Saudi King’s Son Plotted Effort to Oust His Rival

19 Jul 2017   Saudi Arabia

As next in line to be king of Saudi Arabia , Mohammed bin Nayef was unaccustomed to being told what to do. Then, one night in June, he was summoned to a palace in Mecca, held against his will and pressured for hours to give up his claim to the throne. By dawn, he had given in, and Saudi Arabia woke to the news that it had a new crown prince: the king’s 31-year-old son, Mohammed bin Salman. The young prince’s supporters have lauded his elevation as the seamless empowerment of an ambitious leader. But since he was promoted on June 21 , indications have emerged that Mohammed bin Salman plotted the ouster and that the transition was rockier than has been publicly portrayed, according to current and former United States officials and associates of the royal family. To strengthen support for the sudden change in […]

Saudi Arabia Launches Tender For Wind Plant

18 Jul 2017   Saudi Arabia, Wind

Saudi Arabia’s Energy Ministry has invited bids for a 400-MW wind power plant to be built in northwestern Saudi Arabia. According to the press release, the Dumat Al Jandal wind power plant will be the first utility-scale wind project in the Kingdom. The plant’s construction is part of a large-scale program to shift away from the Kingdom’s heavy reliance on oil and gas, stipulated in the Vision 2030 initiative. The shift from fossil fuels to renewables will cost some US$50 billion, to be distributed over the next decade. Plans are to have a tenth of the Kingdom’s power generated by renewable energy sources by 2023. This means 9.5 GW of installed capacity needs to be built by that year. Interested companies will have until August 10 to present their qualifications to the ministry. On August 29, the ministry will start the process for request for proposals, which will continue […]

Saudi Arabia curbs oil shipments to United States:

15 Jul 2017   Saudi Arabia, USA

Saudi Arabia is trying to support oil prices by reducing its crude shipments to the United States in a bid to cut the amount of oil in commercial storage. U.S. crude imports from Saudi Arabia averaged less than 900,000 barrels per day (bpd) in the four weeks ending on July 7, according to the U.S. Energy Information Administration. U.S. imports from Saudi Arabia are running at the slowest rate since 2015, and the slowest for the time of year for over five years ( tmsnrt.rs/2tM4mAO and tmsnrt.rs/2thOpza ). Imports from Saudi Arabia will fall even further to less than 800,000 bpd in August, according to a Saudi industry source familiar with the kingdom’s oil policy. “Saudi Arabia is keen to see an improvement in the oil market and accelerate the […]

The Technical Failure That Could Clear The Oil Glut In A Matter Of Weeks

Saudi Aramco CEO Amin Nasser, while addressing the World Petroleum Congress in Istanbul, stated that the outlook for oil supplies is “increasingly worrying”, due to a loss of $1 trillion ($1000 billion) in investments last year. The skepticism shown by a majority of financial analysts and oil commentators about the real threat to global oil (and gas) production volumes was countered by the news that the production at Saudi Aramco’s main offshore oil field, Manifa, has been hit by technical problems. News sources reported that the output from Saudi Aramco’s massive Manifa oilfield has been hit by a technical problem. The impact of this possible technical mishap is not to be underestimated. Aramco’s Manifa is one of its biggest oilfields, with a targeted production capacity of around 900,000 bpd, to be brought onstream in two phases. At present, the main issue being reported on is that there has been […]

Are The Arab Nations On The Brink Of War – An Interview With Shadow Governance

14 Jul 2017   Qatar, Saudi Arabia

Almost five weeks have passed since Saudi Arabia, its Gulf allies, and Egypt announced the start of a diplomatic boycott against Qatar—a fellow Arab monarchy which, the boycotters contend, encourages sectarianism in the Middle East and sponsors terrorist organizations. Doha has refused to comply with KSA and friends’ demands that it shut down renowned news outlet Al-Jazeera, end the construction of a Turkish military base inside Qatar, and cut off ties with Hezbollah and terrorist organizations. The whole list of demands includes 13 points, each one bent on curbing the Qatari diplomatic initiatives that contradict the Saudi Arabian foreign policy agenda. Risk consultancy Shadow Governance talks to OilPrice about the political players driving the landmark rift between GCC monarchies that has shaken Middle Eastern alliances without causing volatility in oil and natural gas prices. 1. Who are the most influential individuals in the GCC dispute? Generally, the heads of […]

London listing plans to open door to Saudi Aramco

13 Jul 2017   Saudi Arabia

The UK’s financial watchdog is making it easier for state-owned companies to list their shares in what will be a boon for those lobbying for Saudi Aramco to choose London for its initial public offering. The Financial Conduct Authority said on Thursday it is planning to create a category for sovereign-owned companies that are looking to privatise. The move is part of broader plans by the FCA to reform equity and debt markets in an attempt to keep the UK open for business after Brexit. The plans involve creating a category within the “premium” listing rules for companies controlled by sovereign entities rather than by oligarchs or other private groups. Saudi Arabia is seeking to sell 5 per cent of national oil company Saudi Aramco in what is set to become the world’s biggest flotation, with a valuation officials hope will reach $2tn and which would be a fee bonanza for the advisers working on the deal. Saudi Aramco is the world’s biggest oil producer, pumping about one in every nine barrels of crude globally. The kingdom has narrowed its choice of venue for the IPO, scheduled for late 2018, to New York and London. Theresa May, prime minister, and Xavier Rolet, head of the London Stock Exchange, travelled to Saudi Arabia this year in a lobbying effort. The UK listing regime had to tighten controls in 2013 after a string of corporate governance failures in overseas-headquartered companies controlled by foreign tycoons, including ENRC and Bumi.

Oil Under Pressure As Saudis Break Key Promise

12 Jul 2017   OPEC, Saudi Arabia

Saudi Arabia has told OPEC that it had pumped 10.07 million barrels per day in June, up by 190,000 bpd from May, and exceeding its 10.058-million-bpd production level quota under the output cut deal, Bloomberg reported on Tuesday, citing a person with knowledge of the data. OPEC’s Monthly Oil Market Report with data for June is expected to be released on Wednesday, July 12 . According to the latest currently available OPEC report with data for May, Saudi Arabia directly communicated to OPEC that its crude oil output in May was 9.880 million bpd . According to secondary sources, which the market is looking at, Saudi Arabia’s oil production in May was 9.940 million bpd. Under the OPEC/non-OPEC deal to cut production, Saudi Arabia pledged to take 486,000 bpd off its October 2016 level output and keep production at 10.058 million bpd . The market will be watching closely […]

Exclusive: Saudis to cut August oil exports to lowest level this year – source

12 Jul 2017   OPEC, Saudi Arabia

Saudi Arabia will cut crude oil shipments to its customers in August by more than 600,000 barrels per day to balance the rise in domestic consumption during the summer, while staying within its OPEC production commitment, a Saudi industry source said. “There is strong demand for our crude but we are sticking to our OPEC commitments,” the source, who is familiar with the kingdom’s oil policy, said on Wednesday. “In order to meet its OPEC quota and meet its domestic demand during summer, Saudi Arabia has made big cuts in allocations internationally by more than 600,000 bpd for the month of August,” the source said. Crude exports for August will fall to their lowest level this year at around 6.6 million bpd, the source added. Crude allocations to Asia for […]

Aramco CEO sees oil supply shortage as investments and discoveries drop

The world might be heading for an oil supply shortage following a steep drop in investments and a lack of fresh conventional discoveries, Saudi Aramco’s chief executive said on Monday. Unconventional shale oil and alternative energy resources are an important factor to help meet future demand but it is premature to assume that they can be developed quickly to replace oil and gas, Amin Nasser told a conference in Istanbul. “If we look at the long-term situation of oil supplies, for example, the picture is becoming increasingly worrying,” Nasser said. “Financial investors are shying away from making much needed large investments in oil exploration, long-term development and the related infrastructure. Investments in smaller increments such as shale oil will just not cut it,” Nasser said. About $1 trillion in investments have already been lost since a decline in oil prices from 2014. Studies show that 20 million barrels per […]

Saudi Aramco gets approval to set up companies for energy industrial city

11 Jul 2017   Saudi Arabia

Saudi Aramco received the approval of the Saudi government to set up two new companies that will develop and operate a new Energy Industrial City in Saudi Arabia, as the kingdom seeks to expand its industrial base, state news agency SPA reported on Monday. The city will be developed over 50-square km of land in the oil producing region, SPA said quoting a cabinet statement. An earlier report said the city will be close to Abqaiq and will develop energy-related industries. “The government approved Aramco’s offer to set up a developer that will undertake laying out the infrastructure of the city, manage its fixed assets.” This company will eventually own the fixed assets in the city. Aramco will also set up another company to handle operations and maintenance of the city. SPA did not provide further details on the Energy Industrial City which have been in Aramco’s plans for […]

Saudi Aramco Chief Predicts Oil Shortage as Investment Falters

The world is heading for an oil-supply shortage that booming U.S. shale production can’t prevent, the chief executive of Saudi Arabia’s state oil company said Monday. Amin Nasser, the chief executive of Saudi Arabian Oil Co., or Saudi Aramco, said the oil-price downturn of the past three years had reduced investments in long-term…

Energy Mixes Shift But Fossils Remain King

The world’s most valuable company is not Apple, Google, or Amazon. It’s an oil company, and it’s about to go public. Saudi Aramco, the Saudi Arabian state energy goliath, is preparing for an initial public offering in 2018. Depending on who you ask, its valuation will be somewhere between $250 billion and $2 trillion. The discrepancy in estimates stems, at least in part, from oil and predictions of its long-term future as the world’s foremost energy source. How much oil does the world’s largest oil company produce? ExxonMobil, the largest U.S. oil company, pumps 2.5 million barrels per day. Saudi Aramco pumps over 10 million barrels per day, roughly equivalent to one of every eight barrels globally produced. Two of its biggest customers, China and the U.S., each purchase over one million barrels of Aramco oil per day. Even if they ceased production today, BP’s Statistical Review of World […]

Qatar Spat Worsens As Saudi-Led Arab States Vow New Measures

10 Jul 2017   Qatar, Saudi Arabia

The four Arab states that are leading the boycott against Qatar vowed on Friday to take new measures against their tiny gas-rich neighbor after Doha rejected in full the list of ultimatums. Despite the public threats of “new measures”, Qatar’s Finance Minister, Ali Sharif al-Emadi, told The Times today that Qatar is too rich to worry about what Saudi Arabia thinks, and that their huge financial resources would provide the small gas-rich nation the resources necessary to weather the sanctions. “We have sovereign wealth funds of 250 per cent of gross domestic product, we have Qatar Central Bank reserves, and we have a ministry of finance strategic reserve,” al-Emadi told The Times. “Bahrain and Egypt, they are at junk bond level. If you look at Saudi Arabia, they are having genuine issues with their finances,” the minister said. In a joint statement posted on Saudi Press Agency, Saudi Arabia, […]

De-escalate, Pentagon tells Persian Gulf rivals

10 Jul 2017   Qatar, Saudi Arabia

The U.S. military said it was pressing Persian Gulf countries to resolve lingering issues with Qatar, an issue that presents risks to the energy sector. Saudi Arabia in June led a coalition of Middle East countries in severing ties with Qatar, adding a layer of geopolitical risk to the global energy market. Saudi Arabia is the largest oil producer in the Organization of Petroleum Exporting Countries, Qatar is a leading natural gas supplier and the Persian Gulf is a choke point for the flow of energy supplies from the region. The countries accused Qatar of supporting terrorist networks and called on the nation to downgrade its relations with the Muslim Brotherhood in Egypt and close its al-Jazeera media […]

Saudi Aramco’s 2016 oil reserves slip, gas up: annual review

7 Jul 2017   Saudi Arabia

Saudi Aramco said on Thursday its recoverable crude oil and condensate reserves slipped to 260.8 billion barrels at the end of 2016 from 261.1 billion a year earlier. Its gas reserves rose to 298.7 trillion standard cubic feet from 297.6 trillion, Saudi Aramco said in its 2016 annual review. The company said it had discovered two new oilfields, Jubah and Sahaban, and one new gas field, Hadidah, all located in the Eastern Province, the main oil region in Saudi Arabia, the world’s top crude exporter. Saudi Arabia’s national oil company plans to list a stake through an initial public offering in 2018 which is expected to be the world’s biggest IPO. The review did not make a reference to the IPO. Aramco, which has exclusive rights to explore and develop Saudi Arabia’s oil and gas, boosted oil production to a new record of 10.5 million barrels per day (bpd) […]

Production, storage a focus for Saudi Aramco

7 Jul 2017   Saudi Arabia

In an annual review, the Saudi Arabian Oil Co. said new wells drilling at a field near Riyadh could add another 300,000 barrels of oil per day by 2018. The company known commonly as Saudi Aramco issued an annual review of operations during 2016, saying it was positioned to maintain its role as a global oil and gas supplier. Coming off a year that saw crude oil prices hit historic lows, Chairman and Saudi Oil Minister Khalid al-Falih said 2016 brought a sea change to industry thinking. “I believe that history, and indeed the near future, will prove that despite the discouraging business climate, 2016 was a turning point for both Saudi Aramco and […]

Is Saudi Arabia Depending Too Much On The Ghawar Field?

5 Jul 2017   Saudi Arabia

About the only joy Fossil Fuelers have been getting lately is the sweet satisfaction that the ‘Peak Oil’ crowd got it wrong. What the Fossil Fuelers may need to start chewing on is that peak oil, which is merely a description of an inevitability for a limited resource (you heard it here last – fossil fuels are finite) and not a political litmus test, is not their problem ; peak demand is their problem. Why else would the owners of the world’s greatest pool of BTUs decide to sell their bounty to the public? The Saudis have a problem, too. It isn’t just that their economy is slowing down ; roughly one third of their 10 mb/d production is used internally, and much of that is used to make cheap power. They burn it as though it were worth $6 per barrel so they can enjoy 3-cent kilowatt-hours. (U.S. […]

Saudi Arabia Moves to Silence Deposed Prince, Dissidents

3 Jul 2017   Saudi Arabia

Saudi Arabia’s King Salman has appointed his son, Mohammed bin Salman, as crown prince, replacing his nephew, Mohammed bin Nayef, as first in line to the throne. WSJ’s Niki Blasina explains who he is, and what this means for the U.S., Saudi Arabia and the broader region. Photo: Getty Images. The new heir to Saudi Arabia’s throne has launched a crackdown on dissent in recent weeks, attempting to silence activists and critical clerics as well as his deposed predecessor, according to U.S. and Saudi officials familiar with the events. King Salman upended Saudi Arabia’s succession order last month by naming his 31-year-old son, Mohammed bin Salman, crown prince and next in line to the throne, and sidelining his nephew and…

Saudi Arabia Reports First GDP Contraction Since 2009

1 Jul 2017   Saudi Arabia

Saudi Arabia’s gross domestic product fell in the first quarter of 2017 year-over-year, marking the first time the top oil exporter’s economy contracted after the 2014 oil price crash. Government data revealed a 0.5 percent contraction between January and March – the first such occurrence since 2009. The KSA’s economy shrunk due to production cuts it made as part of a deal with the Organization of Petroleum Exporting Countries (OPEC) to limit bloc-wide output to 32.5 million barrels per day. Saudi Arabia has consistently cut production more than required under the deal. Riyadh was due to limit production to 10.06 million barrels per day per its quota, but in February its reported production rate stood at just 9.8 million barrels per day. The non-oil public sector shrunk by 0.1 percent, demonstrating the Kingdom’s resolve in cutting spending as oil revenues—the nation’s main source of income—remain low. The non-oil private […]

Saudi Arabia’s March Towards Civil War

30 Jun 2017   Saudi Arabia

Has Saudi Arabia’s brinkmanship and heavy-handed policies of intervention in the Middle East come back to haunt the desert kingdom? After decades of playing the role of middle man between foreign states and establishing itself as a regional power, Saudi Arabia’s policies of meddling in the affairs of neighbor states and support for terror appear to have finally exacerbated issues in the country which could threaten to plunge it into chaos. Growing anger over attempted austerity cutbacks, economic issues due to the fluctuating price of oil and tell tale signs of royal disagreement over the successor to King Salman bin Abdulaziz Al Saud mean that Saudi adventures abroad are preparing a perfect storm for civil conflict which could lead to further instability in the Middle East. The disruption comes as other states such as Iran and Turkey are positioning themselves as potential competitors to the de facto leader of […]

Only $60 Oil Can Save The Aramco IPO

30 Jun 2017   Saudi Arabia

The OPEC deal is in crisis. All oil price gains derived from the 1.2 million-barrel cut’s initial announcement and implementation have been wiped out, and No. 1 OPEC producer Saudi Arabia’s attempt to draw down American inventories has fallen flat, due in part to insubordination from the No. 2 producer, Iraq, along with upticks in production from Nigeria, Libya, and U.S. shale . The KSA had a clear opportunity to drastically change the direction of oil prices last month, when the Organization of Petroleum Exporting Countries (OPEC) met in Vienna to discuss the duration and scope of the output cut extension. Though Riyadh agreed to continue the deal three months longer than analysts expected (the new deal ends in March 2018, as opposed to December 2017 as many expected), the bloc leader did not heed recommendations to deepen the cuts, keeping production at 32.5 million bpd. In addition, Nigeria […]

Deposed Saudi Prince Is Said to Be Confined to Palace –

29 Jun 2017   Saudi Arabia

The recently deposed crown prince of Saudi Arabia, Mohammed bin Nayef, has been barred from leaving the kingdom and confined to his palace in the coastal city of Jidda, according to four current and former American officials and Saudis close to the royal family.  The new restrictions on the man who until last week was next in line to the throne and ran the kingdom’s powerful internal security services sought to limit any potential opposition for the new crown prince, Mohammed bin Salman, 31, the officials said, speaking on the condition of anonymity so as not to jeopardize relationships with Saudi royals.  It was unclear how long the restrictions would remain in place. An adviser to the Saudi royal court referred queries to the Information Ministry, whose officials could not immediately be reached for comment on Wednesday. A senior official in the Saudi Foreign Ministry reached by telephone on Wednesday night described the account as “baseless and false.”  The Saudi monarch, King Salman, shook up the line of succession last week with a string of royal decrees that promoted his favorite son, Mohammed bin Salman, to crown prince and removed Mohammed bin Nayef, 57, from the line of succession.

Oil Prices Inch Higher As Saudi Crude Oil Loadings Drop

27 Jun 2017   Prices, Saudi Arabia

We discussed back in early May how Saudi Arabian crude export loadings in April had dropped materially. Given the journey time to US shores (hark, seven-ish weeks), the expectation was that we would start to see lower volumes reflected in the June data. And sure enough, as we prepare to exit June stage right, arrivals are on the decline. Imports of Saudi barrels into the U.S. so far this month have dropped below one million barrels per day for the first time since last November. Although U.S. imports of Saudi crude are still averaging higher than year-ago levels so far this year (to yesterday), this is in part due to strong arrivals in the first few months of the year (and particularly January, at nearly 1.4 million barrels per day – wowzers) – offsetting recent weakness. While March-May arrivals have stayed neck-and-neck with year-ago levels, June volumes are finally […]

Middle East At Point Of No Return As Saudi-Qatar Rift Deepens

Saudi King Salman’s decision to appoint his son Mohammed Bin Salman (MBS) as the new crown prince did not come as a surprise. For months, the power struggle between former crown prince Mohammed Bin Nayef (MBN) and MBS happened in plain sight, and a confrontation was imminent. However, King Salman made his own calculations and decided to remove MBN in favor of MBS, providing a continuation of his own family line in the future. Over the last week, the media has been overwhelmed with assessments of the House of Saud and the role MBS will play or has been playing. The family feuds in the House of Saud are notorious, whenever a king dies an internal power struggle will emerge, regardless of what strategies have been implemented before. At present, the Young Prince of Riyadh, Mohammed Bin Salman, has been given the key to power. This has happened at […]

House of Saud unites behind king’s son – for now

23 Jun 2017   Saudi Arabia

The elevation of Mohammed bin Salman as Crown Prince of Saudi Arabia has ended two years of speculation about a behind-the-scenes rivalry near the pinnacle of royal power, but he still has to win over powerful relatives, clerics and tribesmen. The 31-year-old favored son of King Salman was already in effect the day-to-day ruler, with sweeping powers over defense, energy and the economy, even though his cousin Prince Mohammed bin Nayef, 57, occupied the more senior job as crown prince. For two years the meteoric rise of Mohammed bin Salman stirred talk of strains and competition between the two princes, both known by their initials as MbS and MbN. That all ended on Wednesday when the Al Saud […]

Saudi Reshuffle Could Completely Shake Up Oil Markets

23 Jun 2017   Saudi Arabia

The power restructuring in Saudi Arabia this week led to the elevation of 31-year-old Mohammed bin Salman to crown prince, essentially ensuring that he will become the youngest king of Saudi Arabia in the not-too-distant future. The heir apparent has already been effectively running the country for the past few years, so the move was not entirely a shock. Nevertheless, the effects on the oil market could be profound. The new crown prince is known to be a bit unpredictable . In the early phase of the oil price meltdown, he said that prices did not matter. But the plunge below $30 per barrel in early 2016 seemed to have changed the calculus. Last year Saudi Arabia became the principle driver behind a return to “market management,” that is restraining output to stabilize prices. With the OPEC production cuts – which have had to be extended from six to […]

What Does Bin Salman’s Rise Mean For Oil?

23 Jun 2017   Saudi Arabia

The architect of Saudi Arabia’s Vision 2030 plan is now next in line to the throne, the Saudi Press Agency announced on Wednesday, paving the way for the 31-year-old nobleman to forward an assertive regional foreign policy and a much-needed economic overhaul. Prince Mohammed bin Salman, King Salman’s young son, replaced Prince Mohammed bin Nayef, the monarch’s 57-year-old nephew, as heir – signaling the rising tide of a new generation of the Saudi ruling class. The shift was approved by 31 of 34 members of the Allegiance Council, made up of the royal family’s most elite members. The new crown prince has handled the KSA’s two biggest conundrums in recent years: the war against Shiite Houthis in Yemen and the overhaul of an oil-dependent economy. “His ability to deliver on both fronts is still highly uncertain, as the country’s authorities are attempting to implement several generations’ worth of reforms […]

Kemp: Saudi Arabia Eases Austerity Just As Oil Prices Decline

22 Jun 2017   Saudi Arabia

Saudi Arabia’s decision to reverse some of last year’s austerity measures coincides with a renewed decline in oil prices and complicates the financial and economic outlook. (John Kemp is a Reuters market analyst. The views expressed are his own) LONDON, June 21 (Reuters) – Saudi Arabia’s decision to reverse some of last year’s austerity measures coincides with a renewed decline in oil prices and complicates the financial and economic outlook for the kingdom. All allowances, bonuses and financial benefits for civil servants and military personnel cancelled, amended or suspended in September 2016 have been restored and backdated by a royal decree issued by King Salman (“Saudi Arabia slashes ministers’ pay, cuts public sector bonuses”, Reuters, Sept. 26, 2016). The decision coincides with the alteration of the succession in favour of the king’s son Mohammad bin Salman and relieves the previous crown prince of all his posts. The distribution of […]

Oil Market Sees Increased Conflict Risk in Saudi Power Shift

22 Jun 2017   Saudi Arabia

New Crown Prince has taken confrontational stance against Iran More aggressive foreign policy won’t change oil plans: Sen After Mohammed bin Salman’s appointment as crown prince, energy markets need to brace for an even more assertive Saudi Arabian foreign policy that could threaten regional stability in the heart of the global oil industry. The 31-year-old has already supported the kingdom’s involvement in a war in Yemen and broken diplomatic ties with fellow OPEC member Qatar. Both moves were driven by a confrontational stance toward Iran, and MbS, as the prince is known, has already let the intensifying regional rivalry spill into oil policy — last year, he intervened to sink a deal to freeze production because Iran refused to participate. Nonetheless, his government will need higher crude prices to push ahead with his plans to reform the kingdom’s economy, and that makes an immediate change in oil policy unlikely. […]

Saudis Overtake U.S. In Recoverable Oil Resources

21 Jun 2017   Saudi Arabia

Saudi Arabia has regained its top position ahead of the U.S. and Russia as the holder of the world’s biggest recoverable oil resources, as reduced tax rates for state giant Saudi Aramco have added 73 billion barrels of recoverable oil, Norway-based consultancy Rystad Energy said on Tuesday in its annual review of global recoverable oil resources. Saudi Arabia’s recoverable oil resources are now estimated at 276 billion barrels, Rystad said, adding that the Kingdom’s “ revised fiscal regime should incentivize more aggressive exploration and development drilling in the country.” In March this year, Saudi Arabia cut the tax rate on Aramco to 50 percent from 85 percent. The high tax rate was one of the main reasons why international industry experts had not been valuing Aramco nearly as high as the US$2 trillion that Saudi officials have been claiming. Back then, Rystad Energy said that the tax rate cut […]

Saudi Arabia’s Mohammed bin Salman appointed Crown Prince: SPA

21 Jun 2017   Saudi Arabia

Saudi Crown Prince Mohammed bin Nayef has been relieved of his post and replaced by Deputy Crown Prince Mohammed bin Salman, a royal decree published by state news agency SPA reported. (Reporting by Stephen Kalin, Writing by William Maclean; Editing by Himani Sarkar)

Saudi King Salman Ousts Nephew as Crown Prince, Installs Son

21 Jun 2017   Saudi Arabia

Saudi Arabia’s King Salman named his son as the country’s new crown prince, the country’s state news agency said Wednesday, a move that carries far-reaching implications for the monarchy and the biggest economy in the Middle East. Saudi Arabia’s new crown prince, Mohammed bin Salman, known by his initials MbS, is seen as the architect of Saudi Arabia’s attempt to overhaul the kingdom’s oil-dependent economy and carve out a…

Why Is Saudi Arabia Desperate For Higher Oil Prices?

21 Jun 2017   Saudi Arabia

As OPEC’s most significant member and one of the largest crude oil producers in the world, Saudi Arabia typically exerts considerable power over global energy market trends. Yet for the last year, the oil giant has been largely reacting to events outside of its control: surging U.S. shale production, OPEC-member cheating and non-compliance, uncertain demand and a persistent supply glut that has kept prices at or below $50 a barrel. Now, questions are being raised over the state of Riyadh’s big next move: the IPO of Saudi Aramco, the world’s largest and most valuable oil company, which Crown Prince Mohammed bin Salman once projected as being worth $2 trillion. Analysts have doubted the veracity of the official Saudi estimate, with third-party valuations coming in much lower. The Financial Times has estimated the company to be worth between $880 billion and $1.1 trillion, while last March Bloomberg thought an IPO […]

Saudis Foil Attack By Unknown Enemy On Offshore Oil Field

20 Jun 2017   Saudi Arabia

After last week’s attack on several vessels in the Bab Al Mandab, Middle East offshore oil operations again have been hit. According to Saudi Arabia’s national news agency SPA an attack on a major offshore oil field has been prevented. Saudi military sources have reported that the Al Marjan offshore oilfield was attacked by three boats “bearing red and white flags”. Warning shots have been fired, one vessel has been captured, while two others have escaped on Friday. The Saudi military reported that the captured boat “was loaded with weapons for (a) subversive purpose.” No details were given by the Saudi officials on a possible group or country behind the attack. (Click to enlarge) The continuing remarks about a ‘red and white flag’ on the boats could however be a hint to a possible Qatari involvement, as the latter’s flag holds these colors. This would mean a direct military […]

Oil market fundamentals heading in right direction – Saudi’s Falih

20 Jun 2017   Saudi Arabia

File Photo – Saudi Energy Minister Khalid al-Falih attends a session of the St. Petersburg International Economic Forum (SPIEF), Russia, June 2, 2017. Saudi Energy Minister Khalid al-Falih said the oil market is heading in the right direction but still needs time to rebalance, the London-based newspaper Asharq al-Awsat reported on Monday. “In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the cut needs time to take effect,” he told the newspaper, referring to a global deal to curb oil production. “Current expectations indicate the market will rebalance in the fourth quarter of this year, taking into account an increase in shale oil production,” he said. Asked about the recent drop in oil prices, Falih said: “Markets determine prices but are themselves driven by unpredictable variables beyond the control of producing nations.” “Short-term volatility […]