Saudi Arabia

Aramco IPO logic is going up in smoke

13 Oct 2017

With oil prices under pressure and OPEC potentially extending cuts, the Saudi oil company’s IPO always seemed a stretch. Aramco had yet to pick an exchange, and would have had to get its books into shape. With private capital abundant, there's little purpose to all the hand wringing.

Bond investors toss a coin on Saudi reforms

28 Sep 2017

The kingdom’s $12.5 bln bond was oversubscribed. Rising oil prices and low debt help explain the appeal. But the 30-year notes remain a bet that Crown Prince Mohammed bin Salman can wean Saudi Arabia off oil. Investors’ zeal is a benchmark of the demand for emerging market debt.

Qatar jet deal a win for BAE but a loss for London

18 Sep 2017

A deal to buy Typhoon fighter jets will secure thousands of UK manufacturing jobs. But building stronger defence ties with the sheikhdom is a risk when its squabble with Saudi Arabia is unresolved. That could backfire if the kingdom reacts by vetoing a London listing for Aramco.

Saudi can afford to scrap Aramco IPO plan

14 Sep 2017

Achieving the desired $2 trillion valuation for its crown jewel is going to be tricky. Instead of rushing the job, Riyadh may delay listing 5 percent beyond next year. Even then, political and pricing problems will remain. If it wants money, the kingdom has better alternatives.

Saudi reform rethink points to Aramco IPO risks

7 Sep 2017

The kingdom may water down plans to overhaul the economy. That could have implications for the partial privatisation of Riyadh’s most prized asset. If much-vaunted reforms can be delayed, so can a problematic sale that is unlikely to deliver the desired $100 bln windfall.

Hong Kong’s fresh Aramco pitch is flawed

5 Sep 2017

Stock exchange boss Charles Li is pushing a "Primary Connect" scheme allowing Chinese punters to buy into listings in the city. The aim is to lure the bumper Saudi IPO with the prospect of a flood of retail money. But mainland investors have a better playground at home.

Hurricane Harvey darkens forecast for OPEC cuts

1 Sep 2017

The oil cartel’s lower output was finally reviving prices before a storm knocked out around a third of U.S. refineries and dented demand. A glut of crude building up in tankers could force producers to rein in output even longer if they want to tilt the market in their favour.

Viewsroom: Corporate America dumps CEO president

17 Aug 2017

Donald Trump’s inflammatory comments about white supremacists have lost him the support and advice of business leaders, leaving him increasingly isolated and ineffectual. Qatar’s stake in the LSE may prompt Saudi Aramco to shun the exchange for its IPO. Plus: M&A for the MAGA era.

Cox: Qatar kerfuffle could tip Aramco to New York

15 Aug 2017

As the Saudi oil leviathan considers where to IPO, its skirmish alongside regional allies with its Gulf neighbor may play a role. Abu Dhabi punished banks in which Qatar is a big investor. For the LSE, Qatari capital may now be a source of anxiety rather than stability.

Saudi oil cut would be a hit-and-hope strategy

24 Jul 2017

The kingdom’s pact with OPEC to damp output is crumbling and has failed to drain inventories, or boost prices, fast enough. One suggestion is to reduce its own exports by as much as a seventh to shock markets into submission. If that fails, though, Saudi would look impotent.

Aramco exemption bends London IPO rules to limit

13 Jul 2017

The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.

Dubai is weakest link in anti-Qatar stand-off

11 Jul 2017

Keeping its doors open while neighbours kept theirs closed has been a winning strategy for the Middle Eastern trading enclave. The blockade of Qatar will leave a mark on Dubai’s vital real estate sector and trade flows – and could leave its investor-friendly reputation dented.

Qatar’s squabbles turn its gas sour for investors

4 Jul 2017

The world’s largest exporter of liquefied natural gas has revealed plans to increase output by almost a third. World demand for the fuel is growing but so are supplies. Doha’s dispute with its Gulf neighbours makes its new expansion projects less appealing for risk-shy capitalists.

Qatar standoff spells end of Gulf cooperation

3 Jul 2017

Saudi Arabia has granted the sheikhdom two more days to comply with its demands. Failure to reach a deal could escalate the dispute, hitting regional economies and investors in equal measure. But even if both sides back down, plans for greater economic collaboration are on hold.

Oil markets too calm over Qatar ultimatum

23 Jun 2017

Doha’s Gulf neighbours have imposed a 10-day deadline to comply with demands including reparations, closing Al Jazeera and regular inspections. Markets have assumed the standoff won’t turn violent and impact oil supply from the region. That assumption is looking less secure.

Saudi Aramco IPO is exercise in reverse valuation

22 Jun 2017

The oil producer is worth $2 trillion, say its owners. The question might not be whether that valuation is right, but what Aramco’s owners and bankers will have to do to get it. A Breakingviews calculator suggests this will be a stretch of reason.

As Saudi’s new crown prince rises, so could oil

21 Jun 2017

Mohammed bin Salman has replaced his cousin as heir. That gives him a firmer hand to push through economic reform, but maybe less incentive to do so. Where he is likely to make a bigger mark is in squabbles with Gulf neighbours and taking firmer action over a low oil price.

Qatar’s weak link in Saudi stand-off: people

9 Jun 2017

The sheikhdom has the money and resources required to withstand a cold war with its neighbours. Its economy depends on foreign expatriates, though, who account for more than three-quarters of the population. Preventing a demographic drain is the best reason to agree to a truce.

Crude price drop is symptom of rising U.S. clout

7 Jun 2017

U.S. oil fell 5 pct to under $46 a barrel after the nation's stocks unexpectedly increased. Back in the day, an attack in Iran and tension between OPEC members Saudi Arabia and Qatar might have dominated. Demand was soft, too, but America's shale is changing the balance of power.

Qatar crisis points to quick but uncomfortable fix

6 Jun 2017

As Arab states and U.S. President Trump align against the emirate, the chance of leadership change is rising. Another reshuffle within the ruling family might unblock trade and diplomatic links without affecting Qatar’s economic prospects. But the precedent would be alarming.