Category: Saudi Arabia

The oil war has finally reached its tipping point after 13 long months. This struggle between Saudi Arabia, and its much smaller North American adversaries has recently shifted as the application of innovative extraction technologies is now gaining the upper hand. The fiscal damage to national budgets is reaching a breaking point as surpluses have become deficits. Once stable nations face the possibility of having to drastically slash spending as this war has raged risking social instability. Saudi Arabia has figuratively blinked after going eye to eye with the smaller and more nimble players. The question now is how much longer will this war drag on until energy markets once again stabilize, allowing oil-producing nations to balance their budgets. It would be shortsighted to conclude that record low oil prices would not eventually limit future supply, and impair Petrostate economies. Each future barrel of oil has a production cost […]

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« Warm-forged aluminum alloy differential case reduces weight by about 40% | Main | Proportion of biomethane is Swedish natural gas vehicle fuel sales hits high of 73% » by Dalan McEndree for Oilprice.com OPEC next gathers December 4 in Vienna, just over a year since Saudi Oil Minister Ali Al-Naimi announced at the previous OPEC winter meeting the Saudi decision to let the oil market determine oil prices rather than to continue Saudi Arabia’s role of guarantor of $100+/bbl oil. Despite the intense financial and economic pain this decision has inflicted on Saudi Arabia, its fellow OPEC members, and other oil producers, the Saudis have given no indication they plan to alter course. In fact, Saudis have downplayed the impact of lower prices on their country, asserting that the kingdom has the financial wherewithal to withstand lower oil prices. Presumably swayed by Saudi equanimity, financial markets do not […]

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The plunge in global oil prices has eroded an important pillar of Saudi Arabia’s strategy of pumping freely to grab global market share: Demand growth that once looked solid doesn’t look so steady anymore, mainly due to concerns about China. That has again raised a question at the heart of oil markets for more than a year: Could the world’s largest exporter of oil move to restrain production in hopes of stabilizing prices? Even before the general market rout extended into Monday, falling oil prices had sparked renewed calls from Algeria for the Organization of the Oil Exporting Countries to reverse course and discuss production cuts. On Monday, Iran, another OPEC member, said it would welcome an emergency meeting of the group, even as it restated vows to boost its own production as soon as international sanctions are lifted, possibly later this year. Those calls are aimed directly at […]

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Saudi Arabia’s strategy for rebalancing the oil market through a period of lower prices shows few signs of working so far – with rival producers claiming they will raise output even as prices slide to new lows. Saudi policymakers insist the kingdom will maintain its market share and let low prices take care of the surplus by forcing cuts from higher cost producers and stimulating fuel demand. With prices down by more than half compared with the same point in 2014, oil consumption is growing at some of the fastest rates for a decade. There are signs output growth from shale drillers and other producers outside OPEC is starting to slow, but it is not falling yet. Within OPEC, other producers, principally Iraq and Iran, are determined to continue raising their output even as prices slump. “We will be raising our oil production at any cost and we have […]

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The oil price was near its lowest in more than a decade, cash reserves were being depleted, emerging markets were in turmoil and Saudi Arabia was beginning to panic. “It was a very scary moment,” said Khalid Alsweilem, former head of investment at the Saudi Arabian Monetary Agency, the country’s central bank. “And luckily at that point, oil prices started going up. Not by design, by good luck.” That was 1998, and now Saudi Arabia’s fortunes threaten to turn again. This time, luck might not be enough as the government tries to protect the wealth of a nation whose economy has swelled by five times since then. The bastion of conservative Sunni Islam also is paying for an expanding role in regional conflicts in the face of a resurgent Iran and Islamic State extremists who have bombed Saudi mosques. Economists are predicting a budget deficit of as much as […]

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Saudi Arabian stocks were poised to close in a bear market after declining eight straight days as the price of oil slumped, hitting the country’s main source of economic growth. The Tadawul All Share Index sank 2.8 percent to 7,768.88 at 11:11 a.m. local time, a more than 20 percent drop from the most recent peak in April. Brent crude, a benchmark for more than half the world’s oil, slid 0.5 percent to $46.95 a barrel after falling to the lowest since January in earlier trading on Thursday. An unexpected increase in U.S. crude stockpiles and record oil production from Saudi Arabia in June has deepened concern that growing oversupply will continue to impact oil prices as nations tussle over market share. Governments in the six-nation Gulf Cooperation Council, home to about 30 percent of the world’s proven oil reserves, rely on income from crude to fund spending. Most […]

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Saudi Arabia’s oil exports rebounded in June from a five-month low as the largest OPEC producer boosted output to a record. Exports climbed to 7.37 million barrels a day from 6.94 million barrels in May, according to data on the website of the Joint Organizations Data Initiative, or JODI. Output by the world’s biggest exporter rose to 10.564 million barrels daily from 10.3 million. Saudi Arabia told OPEC its June production was a record, exceeding a previous all-time high set in 1980. The 12-member Organization of Petroleum Exporting Countries has been boosting output for most of the past year to maintain market share amid higher production from the U.S. to Russia. That’s led to a glut in the market that’s pushed Brent crude prices down 15 percent this year. OPEC in June pumped 32.5 million barrels a day, a seven-year high, according to data compiled by Bloomberg. Saudi Arabia […]

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Investors sold Saudi Arabian stocks after an International Monetary Fund warning of slowing growth in the Middle East’s biggest economy tipped the equity index into a so-called death cross. Dubai’s shares also slumped. The Tadawul All Share Index slid for a sixth day, closing 2.9 percent lower at 8,197.02, the weakest level in more than seven months. That dragged its 50-day moving average below the 200-day moving average, a signal to some investors that further declines are in store. Al Rajhi Bank’s 2.9 percent decrease was the biggest contributer to the loss. Dubai’s DFM General Index slipped 2.5 percent to the lowest close since April 13. The Tadawul’s drop comes two months after Saudi Arabia opened its stock market to direct foreign investment for the first time to help diversify its economy away from oil. It puts into focus the deepening concern that King Salman is pushing ahead with […]

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