Category:

Saudi Aramco Sadara Chemical Plant Will Start Output in 2015

(Bloomberg) — Saudi Arabian Oil Co. and its partner Dow Chemical Co. plan to start production this year at their $20 billion Sadara chemicals joint venture as other projects being planned in the region face the obstacle of falling crude prices. Ethylene and polyethylene will be the first products of Sadara Chemical Co., Khalid Al Hamid, manager for engineering and technology, said in Dubai. Full output is set for late 2017. Saudi Arabia, the world’s largest crude exporter, started the petrochemical project in 2011 when oil averaged $111 a barrel. Prices have since slumped about 45 percent. Qatar Petroleum and Royal Dutch Shell Plc ended plans last month to build a $6.5 billion petrochemical plant, saying it was “commercially unfeasible” in the current energy market. “Middle East chemicals projects are facing stiff review,” Sanjay Sharma, vice president for Middle East and India at Englewood, Colorado-based IHS Inc., said in […]

Posted On : Published By : Tom Whipple
Category:

Oil’s Black Swans on the Horizon

ENLARGE Next week sees the one-year anniversary of Uber’s ride-sharing service arriving in Riyadh. Disruption is creeping up on Saudi Arabia and the global oil market on which it relies. So far, this has centered on supply: North America’s shale boom has upended expectations of ever-increasing dependence on Middle Eastern crude. But Saudi Arabia’s oil minister, Ali al-Naimi, is also worried about the other side of the equation. At a conference last month, he asked: “Is there a black swan that we don’t know about which will come by 2050 and we will have no demand?” Against the backdrop of oil’s recent plunge, Mr. al-Naimi was thinking of potentially disruptive trends including new technology and efforts to cut carbon emissions. This might seem overdone. Last week, the International Energy Agency released medium-term forecasts showing global oil consumption rising by 6.6 million barrels a day by 2020. Beneath the headline, […]

Posted On : Published By : Tom Whipple
Category:

Little noticed, new Saudi king shapes contours of power

RIYADH (Reuters) – By rapidly appointing two heirs, Saudi Arabia’s King Salman has pressed pause on "succession Sudoku", as one leading local journalist calls speculation over whose star is rising and whose waning in the large and secretive Al Saud ruling family. The choice of 69-year-old Muqrin for crown prince and 55-year-old Mohammed bin Nayef for deputy crown prince resolved the most important dilemma in the dynasty’s recent history – how to jump from sons of its founder, King Abdulaziz, to his grandsons. Yet while much attention has focused on the naming of Muqrin and bin Nayef, less noticed moves have indicated broader changes in the contours of how the Al Saud manage their power and which young princes might rule the world’s top oil exporter and key Western ally in future. After decades during which top jobs were held by the same handful of people, these appointments appear […]

Posted On : Published By : Tom Whipple
Category:

New Mideast Oil Refineries Could Stir Up Fuel-Market Dynamics

Shell’s oil refinery in Singapore has been under pressure. ENLARGE Photo: Agence France-Presse/Getty Images SINGAPORE—The startup of two huge oil refineries earlier this year in the Middle East is set to shake up fuel markets from Asia to Europe as the oil-producing region expands its influence beyond just exporting vast amounts of unprocessed crude. The projects, together with a third large refinery that began operating in Saudi Arabia last year, are expected to process 1.2 million barrels of oil a day at full capacity in the next few months, equivalent to slightly more than 1% of the world’s total oil-refining capacity. They will produce a variety of oil products from diesel fuel to gasoline and jet fuel, with diesel making up for more than half the output. Once up and running, the refineries should have considerable competitive advantages, thanks to new technology, cheap crude-oil feedstock and proximity to markets […]

Posted On : Published By : Tom Whipple
Category:

After Saudi Arabia Crushes The US Shale Industry, This Is Who It Will Go After Next

Whether it is to cripple the will of Putin and end his support of the Syria regime (thus handing the much desired gas-pipeline traversing territory over to Qatari and/or Saudi interests), a hypothesis first presented here in September and subsequently validated by the NYT , or much more simply, just to destroy any and all marginal producers so that Saudi Arabia is once again the world’s most important and price-setting producer and exporter of oil, one thing is clear: the Saudis will not relent from pumping more oil into the market than there is (declining) demand for, until its biggest threat and competitor – the US shale patch – which recently had become the marginal oil producer, as well as its investors – mostly junk bond holders gambling with other people’s money – are crushed, driven before the Saudi royal family, and the lamentation of their women is heard […]

Posted On : Published By : Tom Whipple
Category:

In oil price war, Gulf producers grab market share in Asia

SINGAPORE (Reuters) – Saudi Arabia’s move to slash the price it charges in Asia for its oil this week to the lowest in more than a decade is the latest aggressive action by Gulf states to defend market share in the world’s top oil consuming region. A price war between producers has raged since Saudi Arabia and its Gulf OPEC allies last November chose to keep their taps open in a bid for market share over price, sending oil prices down more than a third to under $50 a barrel in just two months. Since then, Gulf producers – including Saudi Arabia and the United Arab Emirates – have steadily increased shipments to Asia, helped by low production costs that allow aggressive discounts, at the expense of West African and Latin American supplies. Middle East exports to China, by far the region’s biggest importer, increased 2.5 percent to around […]

Posted On : Published By : Tom Whipple
Category:

Saudi Arabia Deepens Asia Oil Discount to Record Low

A flame from a Saudi Aramco oil installion known as "Pump 3" is seen in the desert near the oil-rich area of Khouris, 160 kms east of the Saudi capital Riyadh. Saudi Aramco, as the producer is known, raised the premium for Arab Light crude to the U.S. by 15 cents a barrel to 45 cents to U.S. Gulf Coast benchmarks. Photographer: Marwan Naamani/AFP/Getty Images (Bloomberg) — Saudi Arabia, the world’s largest crude exporter, cut pricing for March oil sales to Asia, a sign that the desert kingdom is continuing to fight for market share. State-owned Saudi Arabian Oil Co. lowered its official selling price for Arab Light crude by 90 cents to $2.30 a barrel less than Middle East benchmarks, the company said in an e-mailed statement Thursday. That’s the lowest in at least the 14 years since Bloomberg began gathering data. “This is further evidence that they […]

Posted On : Published By : Tom Whipple
Category:

Kremlin denies it’s in oil talks with Riyadh

Russia denies its in talks with Saudi Arabia on oil for use as a diplomacy tool in the Syrian conflict. Photo by Denis Larkin/Shutterstock MOSCOW, Feb. 4 (UPI) — There’s no validity to reports Saudi Arabia may be discussing oil production cuts with Russia in exchange for concessions on Syria, an official said Wednesday. A report published Tuesday by The New York Times says the government in Riyadh is using its leverage in the global oil market to pressure the Kremlin to reconsider its long-standing alliance with Syrian President Bashar Assad. Alexei Pushkov, head of the international affairs committee in the Russian State Duma, said there was nothing behind the Times’ report, which cited "an array of diplomatic, intelligence and political officials." "There have been no negotiations on cutting oil production by the Saudis in exchange for Moscow’s refusal to support Assad," he said. "[The report is] a canard." […]

Posted On : Published By : Tom Whipple
Category:

Saudi Oil Seen as Lever to Pry Russia Away From Syria’s Assad

WASHINGTON — Saudi Arabia has been trying to pressure President Vladimir V. Putin of Russia to abandon his support for President Bashar al-Assad of Syria , using its dominance of the global oil markets at a time when the Russian government is reeling from the effects of plummeting oil prices. Saudi Arabia and Russia have had numerous discussions over the past several months that have yet to produce a significant breakthrough, according to American and Saudi officials. It is unclear how explicitly Saudi officials have linked oil to the issue of Syria during the talks, but Saudi officials say — and they have told the United States — that they think they have some leverage over Mr. Putin because of their ability to reduce the supply of oil and possibly drive up prices. “If oil can serve to bring peace in Syria, I don’t see how Saudi Arabia would […]

Posted On : Published By : Tom Whipple
Category:

Saudi King Reshuffles Cabinet, Keeps Oil Minister in Place

ENLARGE Saudi Arabian Oil Minister Ali Al-Naimi retained his post in a government shake-up Thursday, but King Salman canceled the kingdom’s top oil decision-making council. Photo: European Pressphoto Agency Saudi Arabia’s new king announced Thursday a shake-up of the kingdom’s government, but kept veteran Oil Minister Ali al-Naimi in place. Mr. al-Naimi, who has been the kingdom’s oil minister since August 1995, was instrumental in the recent decision by the Organization of the Petroleum Exporting Countries, or OPEC, to keep its oil production target steady , a move that has since sent global oil prices into a tailspin. But King Salman canceled the Supreme Council for Petroleum and Minerals, which has been traditionally kingdom’s top decision-making body on oil, according to royal decrees announced on the state-owned television. The council was led by the king and includes senior royal family members, ministers including Mr. al-Naimi and top industry executives. […]

Posted On : Published By : Tom Whipple