Saudi Arabia

Brazen Trump oil claims may yet fire partial deal

2 Apr 2020

A day before meeting with beleaguered U.S. crude-industry execs, the American president predicted an epic supply cut by Saudi Arabia and Russia. Yet he may only need a chunk of the 10 mln barrels a day reduction he’s hoping for to keep the U.S. shale industry from total collapse.

Corona Capital: Ackman’s hedge, Oil stockpiles

26 Mar 2020

Concise views on the pandemic’s corporate and financial fallout, including investor Bill Ackman’s surprise reversal of fortune, and the U.S. shale oil bailout that wasn’t.

Oil storage crisis is new threat to OPEC

25 Mar 2020

The double whammy of a Saudi Arabia-led price war and a virus-fuelled collapse in demand points to a huge oversupply of crude this year. Space to store the surplus may run out at this rate. If that’s exhausted, a barrel of the commodity could soon be worth less than $20.

Trump can make oil markets balance in his favour

20 Mar 2020

To hike low crude prices, the U.S. President needs a big producer to cut supply. He already has leverage over Saudi Arabia and more scope to threaten Russia with sanctions. Add in output curbs by shale, and a path exists to keep American producers afloat but oil values in check.

Review: A loose cannon on the deck of the world

20 Mar 2020

Saudi Arabia’s decision to launch a full-on oil price war is destabilising, risky and aggressive. But as Ben Hubbard’s new book shows, it’s a signature move for Crown Prince Mohammed bin Salman. It seems unlikely that his kingdom will become any less repressive – or volatile.

Gulf’s sovereign funds are now gilt-edged airbags

19 Mar 2020

With oil now below $30 a barrel and emerging market outflows exceeding those seen in 2008, the region’s dollar pegs will be tested. Saudi Arabia and others may cut budgets in response. At the very least that implies ADIA, QIA and Mubadala’s dealmaking wings could be clipped.

Cheap gas drives auto industry to distraction

19 Mar 2020

With crude oil futures near $26 a barrel, drivers might lose enthusiasm for electric vehicles if governments put support on hold and let pump prices free-fall. But the push away from hydrocarbons is about more than petrol costs. Carmakers are ill-advised to let investment slide.

Viewsroom: Oil shock

12 Mar 2020

A major rift between Saudi Arabia and Russia has sent oil prices plummeting just as the Covid-19 outbreak saps demand. The fallout is pummeling U.S. shale producers and calling traditional energy-security concepts into question. Plus, market fallout in Japan, China and India.

MbS vs. Putin will be an oil drama in several acts

11 Mar 2020

The Saudi crown prince and Russian president’s crude supply pact has blown up into a full-on price war. On the face of it, Moscow’s budget means Vladimir Putin is better able to bear extended low prices. But Mohammed bin Salman also has options to keep the wolf from the door.

Big Oil’s wipeout invites a new sort of activist

9 Mar 2020

Plunging crude prices have sent BP shares down 20%, with Shell and Total close behind. The rout could make it harder for oil majors to shift away from fossil fuels. Dirt-cheap valuations offer a way for activists to push CEOs to cut investment and return cash to shareholders.

Saudi sets global oil a stress test few will pass

9 Mar 2020

An all-out price war launched by the kingdom crashed the crude price over 20%. Values well below $40 a barrel are a setback for U.S. shale producers, global oil majors, national budgets, and the climate change fight. At least Saudi oil giant Aramco will share the short-term pain.

Coronavirus infects air over global markets

9 Mar 2020

Monday’s plunge in oil prices and signs that Western nations may act drastically to slow the virus reversed a Chinese stock rally; some major Asian indexes fell 6%. Any benefits of cheaper energy are overshadowed by fear of the unknown in export dependent East Asia and beyond.

OPEC Russian roulette yields circular firing squad

6 Mar 2020

Moscow has rejected the cartel’s pleas for a supply cut to ease a virus-linked demand slump. Given the scale of the oil market imbalance, an inadequate deal was the best that could have been hoped for. But OPEC’s efforts to force the issue look like leaving everyone worse off.

OPEC readies knife for oil demand-slump gunfight

3 Mar 2020

The cartel and its Russian allies are set to curb crude supply again, to counter a virus-induced price fall. But even a 1 mln barrels per day cut may not do the job. To hike prices, OPEC needs Russia to prove helpful, Libya to stay troubled, and the coronavirus to not get worse.

Bezos-Saudi spat has e-commerce proxy war

3 Feb 2020

Tensions between Riyadh and the Amazon boss may seem a stateside phenomenon. Yet Saudi Prince Mohammed bin Salman and Jeff Bezos have backed different horses in the battle for the $34 billion Middle East e-commerce market. That implies risks for both sides.

Virus panic makes OPEC cat-herding even harder

28 Jan 2020

Oil prices have dipped below $60 a barrel on fears the coronavirus will hit growth. The Saudi-led producers group already has a job convincing the likes of Russia to keep supporting cuts agreed in December. The virus jitters might make others, such as Riyadh, want to double down.

Saudi Newcastle punt is not as silly as it sounds

27 Jan 2020

Riyadh’s wealth fund is mulling a 340 mln pound takeover of the English soccer club. It’s another eyebrow-raising move in Saudi’s efforts to diversify its economy. But a repeat of Abu Dhabi’s successful reboot of Manchester City could help repair the kingdom’s tarnished brand.

Saudi nuclear ambitions may further fray U.S. ties

14 Jan 2020

Riyadh could soon award tenders to build two nuclear reactors. Picking Russia’s Rosatom would heighten tensions with Washington, its traditional ally. And if the kingdom also lobbies for scope to create nuclear weapons, it would make for an awkward comparison with archfoe Iran.

Aramco’s war-risk snake trumps oil-price ladder

6 Jan 2020

The threat of U.S. sanctions on Iraq should boost the oil price, and the Saudi giant’s value. Yet its shares have slumped to their lowest level since trading commenced last month. That may be because the company’s operations are more likely to be a target for Iranian retaliation.

Aramco’s next stop will be bond, not stock, market

18 Dec 2019

Despite raising $25.6 bln from listing 1.5% of Saudi Aramco, Riyadh will want to flog more. But even if it can find a friendly foreign wealth fund, Saudi might still have to cut the price. An easier path would be to load Aramco up with debt and pay itself a fat special dividend.