Category: Saudi Arabia

Saudi Arabia failed to attract offers for additional oil cargoes for loading in October, industry sources said, in a sign that the market remains over supplied despite recent production cuts. The offers were made to some customers in Asia ahead of maintenance at a major Saudi refinery, two sources close to the matter said, as the world’s biggest crude exporter seeks to maintain its market share in Asia. Yet in a sign of the ongoing price war between producers and the surplus supplies, potential buyers who received the offers said they were too prompt in delivery, adding that cheaper alternatives such as Iraq’s Basra crude were also available. "Even if the November OSPs (Official Selling Prices) are attractive, we do not have room to take more," one of the potential buyers said, declining to be named due to company policy. Refinery maintenance across Asia in the third quarter has […]

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Global oil prices were marginally improved in September but the combination of oversupply and sluggish demand continued to bear on WTI and Brent prices, Jadwa Investment said in its latest edition of the monthly Chartbook. However, from a regional perspective, Saudi crude oil production increased by 7% on comparable 2014 levels. It is envisaged that Saudi crude oil production will remain around current levels for the foreseeable future. Non-oil exports in July remained 20.6 percent lower than the same period last year. Petrochemicals and plastics, the two largest non-oil exports, continued to be the hardest hit so far in 2015, falling more so compared to other non-oil exports. Imports also fell by 12.2 percent, year-on-year. Meanwhile, bank holdings of government bonds rose sharply in August reflecting the new approach in government financing strategy. More funds were spent on capital projects and it is envisaged that more government bond issuance […]

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The lack of a clear leader or "anchor" in the global oil market is fueling uncertainty and leading to sharp swings in crude prices, but this uncertainty is unlikely to continue for long, a senior Saudi oil adviser said. The comments by Ibrahim al-Muhanna suggest that Saudi Arabia and the rest of OPEC understand that they are unable to manage the oil market alone for the time being, and would like to see some kind of collective mechanism to reduce the current instability in the market. "In the current circumstances, the international oil market could continue in an unstable situation, where there is a lot of uncertainty with the lack of a market anchor," Muhanna, an adviser to the Saudi oil minister, told a closed-door energy event in Kuwait on Wednesday. His comments were released publicly on Friday. "In the end, this means the inability of investors to find […]

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Saudi Arabia is ordering a series of cost-cutting measures as the slide in oil prices weighs on the kingdom’s budget, according to two people with knowledge of the matter. The finance ministry told government departments not to contract any new projects and to freeze appointments and promotions in the fourth quarter, the people said, asking not to be identified because the information isn’t public. It also banned the buying of vehicles or furniture, or agreeing any new property rentals and told officials to speed up the collection of revenue, they said. With oil accounting for about 90 percent of revenue in the Arab world’s largest economy, a drop of more than 40 percent in crude prices in the past 12 months has combined with wars in Yemen and Syria to pressure Saudi Arabia’s finances. While public debt is among the world’s lowest, with a gross debt-to-GDP ratio of less […]

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Saudi Arabia kept its crude oil production steady in September, an industry source told Reuters, maintaining high output as part of a strategy to defend market share. Saudi Arabia pumped 10.225 million barrels per day (bpd) of crude oil last month, down about 60,000 bpd from August, the source said. Crude supplied to the market in September was 10.260 million bpd, up about 70,000 from a month earlier, he added. Supply to the market, both domestically and for export, may differ from production depending on the movement of oil in and out of storage. Saudi-based industry sources have said the kingdom’s crude production was likely to stay around current levels in the fourth quarter as rising global demand would offset a decline in domestic crude burning for electricity. The United Arab Emirates’ crude production in September was 3.001 million bpd, compared to 3.026 million bpd in August, while Kuwait’s […]

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Informed sources told Arabic-language al-Ahd news agency that King Salman is now in the Intensive Care Unit (ICU) section of King Faisal Specialist Hospital in the Saudi capital. The sources also said that given the Saudi king’s unstable and aggravating health conditions, officials have ceased plans to transfer him to US hospitals. King Salman, 80, is thought to have Alzheimer’s or dementia and the government is practically administered by his Crown Prince Muhammad bin Nayef. According to witnesses, his exact state of dementia is a source of speculation but he is known to have held cogent conversations as recently as last October. He can also forget what he said minutes ago, or faces he has known all his life. This is typical of the disease. Sources close to the Saudi monarchy revealed earlier this year that the number of hospital visits by King Salman in the last few months […]

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A ‘perfect storm’ of interconnected crises could see the autocratic Saudi state disintegrate within ten years, argues Nafeez Ahmed. Last September, a senior Saudi royal called for a “change” in leadership to fend off the kingdom’s collapse. In a letter circulated among Saudi princes, its author, a grandson of the late King Abdulaziz Ibn Saud, blamed King Salman for endangering the monarchy’s survival. Informed observers think such a prospect “fanciful”, but the letter’s analysis of Saudi Arabia’s predicament is startlingly accurate. The House of Saud is on the brink of a perfect storm of interconnected crises that could be the monarchy’s undoing within the next decade. Saudi Arabia’s primary source of revenues, of course, is oil. For the last few years, the kingdom has pumped at record levels, keeping global oil prices low, and undermining OPEC rivals – who cannot afford to stay in business at such squeezed profit […]

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With Saudi Arabia a critical player in the latest flare up in mid-east violence, while domestically the country faces increasing financial and economic pressure as a result of the collapse in oil prices coupled with the recent fomenting of a “royal coup ” in Saudi Arabia, an honest and fresh perspective, not one pre-approved by the mainstream US media, into what is really going on in the kingdom was long overdue. We are grateful to regular contributor Erico Matias Tavares who has kindly shared this interview with Dr. Ali Alyami , a native of Saudi Arabia and a citizen of the US for the past four decades. From an early age he has been advocating for political, economic and social reform in his native homeland. He is the founder and Executive Director of the Center for Democracy & Human Rights in Saudi Arabia, a Washington, D.C. based non-profit tax […]

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Saudi Arabia’s net foreign assets dropped to the lowest level in more than two years in August, as the world’s largest crude exporter grappled with oil prices below $50 a barrel. Net foreign assets held by the central bank fell for a seventh month in a row to $654.5 billion, the lowest since February 2013. That compares with $661 billion in July, the Saudi Arabian Monetary Agency said in its monthly report. The oil rout has pressured Saudi Arabia’s public finances, pushing the government to search for savings and sell bonds for the first time since 2007. The kingdom’s budget deficit may widen to up to 20 percent of gross domestic product this year, according to the International Monetary Fund. The central bank’s net foreign assets have fallen a total of $82.5 billion since peaking at an all-time high of $737 billion last August, though the decline began to […]

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