Category: Saudi Arabia

VIENNA—Ali al-Naimi was an unlikely Saudi oil boss. At Saudi Arabian Oil Co., he was known as a technocrat’s technocrat, a company man hired out of a shepherd’s field at age 12—shy and wonky with no political profile. But during about 20 years as oil minister, Mr. Naimi has become the most influential voice in the world oil market and helped steer the Organization of the Petroleum Exporting Countries through some of its most tumultuous times. The spotlight is back on Mr. Naimi this week as he prepares for what may be his last OPEC meeting on Friday . The 79-year-old has previously said he wants to retire, and people familiar with the matter say a successor is being groomed. OPEC ministers on Friday are expected to cement a policy decision that analysts say will be Mr. Naimi’s lasting legacy: Instead of controlling the price of oil by cutting […]

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VIENNA When it comes to whether Saudi Arabia will invest billions of dollars to increase its ability to pump more oil, boosting the world’s only large stand-by reserve, minister Ali al-Naimi has a quick answer: show me the return. Naimi, speaking informally to reporters in Vienna on Thursday, was asked whether the kingdom needs to lift its capacity now that it is pumping crude at its fastest rate in over three decades to meet a resurgence in demand. The country last embarked on a $100 billion push to raise its capacity a decade ago amid a price boom fueled by China’s growth. It can now pump as much as 12.5 million barrels per day (bpd), scarcely 2 million bpd above current output. With casual banter, Naimi responded: "Is there demand for Saudi crude? Can you guarantee it? If I go and put a dollar, will you guarantee that I […]

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Saudi Arabia is on track to become the world’s fifth-largest military spender by 2020 as it boosts its defence budget by 27 per cent over the next five years despite lower oil prices. With regional conflicts worsening the oil-rich kingdom‘s neighbours, the United Arab Emirates and Qatar, are also planning to increase spending on their militaries, said consultancy IHS Jane’s Aerospace, Defence & Security. By contrast, smaller Gulf states are reacting to the lower oil-price by making deeper cuts to defence plans. The IHS forecasts assume oil prices will recover to $80 a barrel by 2017, rising to $100 a barrel by the end of the decade. IHS says Saudi defence spending will be $48.7bn in 2015, a 2 per cent contraction over last year. It will rise slightly to $49.5bn next year before jumping to $52bn in 2017 and reaching $62bn by 2020. Riyadh’s defence budget had been […]

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Military budgets for some Arab countries in the Middle East remains strong despite low prices for crude oil. File photo by Mohammad Abdullah/UPI LONDON, June 2 (UPI) — Despite the heavy influence oil revenue plays for some Middle East countries, spending on defense remains positive, a review from IHS Inc. finds. IHS in its review of defense spending by Saudi Arabia, Qatar and United Arab Emirates finds upward momentum despite a weakened crude oil market. "Despite Saudi Arabia’s heavy exposure to oil price fluctuations, there have been very few signs of any severe reactionary adjustments to government spending trends," Craig Caffrey, principal defense budget analyst at IHS Jane’s Aerospace, Defense and Security, said in a Tuesday statement. "The Kingdom has only cut defense and security expenditure once over the last 15 years." IHS finds Saudi Arabia’s defense budget has accelerated to a rate of 19 percent a year since […]

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The authorities say they have dismantled Isis cells yet they have done little to dissect its ideology

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CAIRO — When King Salman became Saudi Arabia’s ruler this year, few people expected much change. He was 79 and reputedly in ill health. The longtime governor of Riyadh province, Salman was known as a capable administrator and skilled mediator, not as a man who challenged the status quo. But since taking the throne in January, Salman has shaken up Saudi Arabia’s foreign policy and the royal family’s succession plans. He has launched a bombing campaign against Shiite rebels in Yemen and increased support for rebels in Syria , signaling a more assertive role for an oil-rich kingdom that traditionally relied on the United States for security. Salman’s goal, analysts say, is to guard Sunni Muslims against what he sees as the growing influence of Shiite Iran. “This is a Saudi moment for the region,” said Nawaf Obaid, a former adviser to the Saudi royal court who is now […]

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Saudi Aramco withdraws notice of termination for rig Hercules 261, owner says. Photo courtesy of Hercules Offshore HOUSTON, June 1 (UPI) — U.S. rig company Hercules Offshore said Monday its clients in Saudi Arabia withdrew a notice to terminate a contract for its services. Hercules said Saudi Aramco withdrew its notice of termination for rig Hercules 261, "declaring that all terms and conditions of the contract remain in full force and effect for the remainder of the five-year term of the contract." Hercules in February said it was engaged in talks with the Saudi oil company to reduce the day rates for two other rigs, Hercules 262 and Hercules 266, when the contract was suspended. Hercules 261 is listed in the company’s fleet status update as having a day rate around $135,000. Rigs 262 and 266 have a combined average day rate of around $118,000. "Notwithstanding the receipt of […]

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VIENNA Saudi Arabia’s oil minister Ali al-Naimi said on Monday he expects oil demand to pick up in the second half of 2015 while supply decreases, in a sign that the kingdom’s strategy of defending market share was working. The comment indicates Saudi Arabia will likely propose not to change output policy at producer group OPEC’s meeting on Friday, although Naimi declined to speak directly on the issue. "The answer is yes," Naimi said in his first public comment upon arrival in Vienna, where the meeting will take place, when asked whether the strategy of defending market share through higher supplies and lower oil prices was working. "Demand is picking up. Good! Supply is slowing, right? That is a fact," he told reporters. "You can see that I’m not stressed, I’m happy," he said. Naimi was the key architect of OPEC’s decision at its last meeting in November 2014 […]

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Photo Construction in the King Abdullah Financial District in Riyadh. Oil production has surged in Saudi Arabia, which is trying to keep up with its own growing demand. Credit Tomas Munita for The New York Times HOUSTON — The international cartel of oil producers has long followed the same basic strategy. When the market was soft, the group slashed production to raise prices. But Saudi Arabia, the heavyweight of the Organization of the Petroleum Exporting Countries, has a new agenda. It is now less concerned about the price of crude oil in the global markets and more concerned about delivering fuel to its growing economy. The shift is upending the traditional market dynamics that have influenced the direction of oil prices for decades. While American producers are pulling back in the face of the current weak prices, Saudi Arabia, the largest OPEC producer by far, has been pumping more […]

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DUBAI Middle East fund managers have on balance become bearish on the region’s biggest stock market, Saudi Arabia, after oil’s rally ran out of steam and the kingdom confirmed strict rules on foreign investment, a monthly Reuters survey shows. The survey of 15 leading investment firms, conducted over the past 10 days, shows none expects to raise its equity allocation to the Middle East in the next three months – the first time this has been recorded since the survey was launched in September 2013. Last month, 33 percent of respondents said they planned to increase their equity allocations. The proportion intending to cut equity allocations has risen to 20 percent from 7 percent. Oil prices, which are a major driver of economic performance in the region, are headed for a monthly loss after rebounding in April, and their longer-term outlook remains uncertain. Also, falling trading volumes and thin […]

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