Some saw this well publicized meeting as the first sign of an emerging partnership between the two greatest global oil producers. If the warmth of the meeting was any evidence, it seems likely that Russia, a non-OPEC producer, might come a lot closer to the fold.That could mean that, at the very least, Russia would have a voice in the cartel’s policy decisions on production. And if so, it would be a voice on the side of stable but rising prices.
The great Indian journalist, M.K. Bhadrakumar (MKB), may have been the first to point out that there was plenty of reasons for the Saudis and Russians to come closer together. Among these are the U.S.’ diminishing dependence on Middle Eastern energy, due to the momentous development of shale resources. There’s also the over-riding goal of the U.S. to pivot toward the East, where a huge economic transformation is unfolding, while reducing the U.S. role in the Middle East. It’s clear that the Saudis are going to have to make new friends. Continue reading
Saudi oil minister suggests Opec oil cartel would keep its production ceiling at 30m barrels per day
Oil slumped on Wednesday as expectations that Opec will cut production faded following dovish remarks by cartel kingpin Saudi Arabia, which could signal the beginning of a price war.
Speaking on the sidelines ahead of Thursday’s critical meeting of the Organisation of Petroleum Exporting Countries (Opec) in Vienna, Saudi oil minister Ali Al-Naimi said: “The market will stabilise itself eventually”.
Brent crude – a global benchmark comprised of a blend of high-quality oil from 15 North Sea fields – fell 1.3pc to $77.30 per barrel after Mr Naimi’s comments, before recovering to trade flat at $78.29 by late afternoon. Brent crude has fallen 30pc since June. Continue reading
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As the fracking revolution eases demand for the kingdom’s oil and gas, a billionaire prince warns his nation to find new income.
Billionaire Prince Alwaleed bin Talal said the Gulf Arab kingdom needed to reduce its reliance on crude oil and diversify its revenues.
His warning comes as rising shale energy supplies in the United States cut global demand for Saudi oil. Continue reading
It should be no secret that the Saudis are both fed up with the Obama administration and seek an end to the Iranian regime. They have even threatened to go nuclear should Iran be allowed to continue its nuclear program.
Hardly a day goes by without the Obama administration pointing out in some US media outlet the futility, wrongheadedness, hazards, superfluity etc. of Israel military action for pre-empting a nuclear Iran. The public has been informed, for instance, that it would only set Iran’s program back by a year, and that the ayatollahs have put their nuclear bomb program on hold. So what’s the hurry?
But about the equally strenuous White House effort to hold Saudi Arabia back from attacking Syria as well as Iran – hardly a word sees the light of day.
The fuss and pother about Israel’s intentions distract attention from the very real fears in Washington about the Saudi royal family’s plans for military action against Iran and its allies, Syria and Hizballah, and Riyadh’s efforts to draw the heads of the Gulf oil emirates into the action.
Riyadh puts no trust in the sanctions and embargo Washington and its Western allies have put in place to curb Iran’s nuclear aspirations. Instead, they see sanctions becoming a boon for Tehran
Tuesday, March 20, oil fell by only 1 percent after the Saudis announced their most detailed steps yet to make good on any shortfalls generated by the embargo on Iranian oil and the cutoff from March 17 of Iran’s banks from transactions through the Belgian-based Society for Worldwide Interbank Financial Telecommunications (SWIFT), which facilitates most of the world’s bank transfers.
Money in Iran’s pocket from sanctions-boosting oil prices
Saudi Arabian Oil Minister Ali al-Naimi announced the kingdom was pumping 9.9 million barrels per day – the highest level in decades – and was willing to turn the taps up to a maximum capacity of 12.5 million bpd to meet its customers’ every request.
Iraq, too, added 30,000 barrels per day to its production of 2.1 million bpd.
But these steps failed to reverse the upward price trend.
And the sanctions’ deleterious impact on Tehran was offset by profits from skyrocketing oil prices: Not only were the extra costs of circuitous trade routes covered, but the declining value of the Iranian rial flattened.
“We are ready and willing to put more oil on the market, but you need a buyer,” Al-Naimi said bitterly, aware that no matter how much more oil Saudi Arabia may pump, Tehran is still ahead of the sanctions game. Only if China, Japan and India can be persuaded to line up behind the Obama administration and make genuine cutbacks in their oil purchases from Iran, would the topped-up Saudi oil production come into play.
DEBKA-Net-Weekly’s sources in the Gulf report that the Saudis suspect the Obama administration of publicly talking up the latest round of sanctions (Barack Obama: “We’ve applied the toughest sanctions ever on Iran”), while assuring Tehran in quiet talks (See the item in this issue about secret US-Iranian talks), that, so long as they keep the dialogue going, sanctions will put Iran in the black.
US stalls British-Saudi arms sales
This week, US acted to stymie Saudi operations in two key arenas:
1. Iran was the first: They suspect the White House of ordering US International Traffic in Arms (ITAR) to stall the sale of British precision-guided Paveway IV bombs developed by Raytheon UK, a weapon that would enable Saudi Arabia to attack key Iranian Persian Gulf sites, such as its naval bases on the Sirri, Abu Musa, Greater Tunb and Lesser Tunb islands around the strategic Strait of Hormuz, and strategic locations on Iran’s Persian Gulf coast.
The Saudis believe the US administration is deliberately keeping those assault weapons out of their hands to frustrate a potential attack on Iran.
They had pinned their hopes on British Prime Minister David Cameron interceding on their behalf with President Barack Obama during his visit to Washington in mid-March and getting the weapons released to Riyadh.
But the bonhomie and shared jokes aside, Cameron made no headway in budging the US president from his opposition to the sale, although British interests are also at stake. The sale to Saudi Arabia of 72 Eurofighter Typhoons delivered by BAE Systems (the combination of British Aerospace and Marconi Electronic Systems), is still up in the air because without the precision-guided bombs, those bomber jets are not much use to the Saudis.
Washington stops Jordan allowing Saudi troops transit to Syria
2. The Obama administration is firing every stratagem in its quiver to hold Saudi Arabia back from military intervention in the Syria crisis.
DEBKA-Net-Weekly’s sources in the Persian Gulf disclose exclusively that, two weeks ago, SaudiKing Abdullah secretly asked Jordan’sKing Abdullah for permission to send Saudi military forces into Syria by way of the Hashemite Kingdom.
Senior Saudi princes, including Saudi Defense Minister Prince Salman bin Abdulaziz, had already been in touch with their Jordanian counterparts to discuss detailed plans which designated the routes Saudi forces would take, the Jordanian bases they would use and the Saudi Air Force’s tactics for covering the advancing Saudi troops and shielding the Kingdom of Jordan against potential Syrian air force action.
The Saudis plan to send troops in to the Syrian Druze Mountains and Horan regions for setting up safe havens to protect the beleaguered civilian population from Syrian military and security forces.
On March 15, Prince Salman attended a military parade on the grounds of the Eighth King Fahd Brigade in Tabuk in northern Saudia near the Jordanian border.
It was attended by a high-powered lineup: Chief of Staff Gen. Hussein Al-Qubail, Gen. Abdul Rahman Al-Binyan, Director General of the Prime Minister’s office, Gen. Prince Khaled bin Bandar, commander of Land Forces, and Maj. Gen. Eid Al-Shalawi, Commander of the Northern Region.
The parade of military prowess and resolve was mean to impress on Jordan that the Saudis were serious about getting a force into Syria through its territory.
The two Abdullahs in deep discord
This Saudi plan was soon nipped in the bud.
Riyadh was informed that US officials had warned the Jordanian monarch against acceding to the Saudi request. Stuck in an impasse, the Hashemite king stopped answering insistent Saudi calls for clarifications.
Seeing their plans for intervention in Syria in ruins, the Saudis decided to get their own back.
In an unprecedented move against a fellow Arab ruler, they arranged for an Arab diplomat, who remained anonymous, to inform the Omani Gulf News agency that Saudi arms were being pumped to the anti-Assad Syrian rebels and the first shipment was on its way to destination through Jordan.
By spilling the beans about Jordan’s clandestine role in this traffic, Riyadh exposed the kingdom to Syrian punitive action.
This maneuver brought the Jordanian king hurrying over to Riyadh for a secret visit.
Our sources report that when he tried explaining to the Saudi king that if Assad was toppled his successors would be worse, he was brusquely brushed aside. Saudi King Abdullah, who is twice the age of the Hashemite royal, reproved him sharply and told him it was time to make up his mind on which side he was in the Middle East.
The two kings Abdullah parted in deep discord.
Saudis are gunning for the US and Turkey
As for Syria, Bashar Assad will have understood by now that Riyadh is rolling up its sleeves for military action against him as soon as a way can be found. Four complications are unfolding:
First: The disclosure that weapon shipments to anti-Assad rebels were passing through Jordan has revived the Saudi pledge of a military and air shield for the Hashemite Kingdom against Syrian aggression. This may lead to military and aerial clashes between Syria and Saudi Arabia on Jordanian soil very near the sensitive junction of Jordanian, Lebanese and Israeli borders.
With this eventuality in mind, Riyadh is reported by DEBKA-Net-Weekly’s military sources to have selected the Druze Mountains and Horan region as potential safe havens for persecuted Syrians.
Second: Saudi-US relations are in sharp decline: Riyadh’s Syrian initiative is an act of protest against Washington’s decision to refrain from military intervention to stop Assad’s brutal suppression of the revolt in Syria – even after at least 8,000 Syrian civilian deaths.
The encounter three weeks ago in Tunis between US Secretary of State Hillary Clinton and Saudi Foreign Minister Saud al-Faisal, ended with Faisal angrily stalking out with words to the effect of: if you don’t take action against Bashar Assad, we will.
The Saudis fully intend now to make good on that threat.
Third: The Saudis are gunning for Turkey. They intend to show up Ankara’s toothlessness in the fight against Assad in contrast to its leaders’ high rhetoric about their prowess as a Middle East Muslim superpower.
Most of all, they can’t abide Prime Minister Tayyip Erdogan’s pretensions as go-between for the back-channel dialogue the Obama administration is conducting with Iran’s Supreme Leader Ayatollah Ali Khamenei. (See a separate item in this issue.)
Fourth: Riyadh finds it essential to counteract Iran’s airlift of arms and equipment into Syria through Iraqi airspace. The Saudis refuse to stand by idly while Iran enhances its position in Syria and Iraq.
Full article: Obama Holds Saudis Back from Striking Iran – and Syria Too (DEBKAfile)