All Posts (89)

1. Saudi Crown Prince in Pakistan and India: Crown Prince Mohammed bin Salman visited Pakistan and India on 17-18 February and 19-20 February, respectively. These visits took place just days after the suicide attack on CRPF personnel at Pulwana in Jammu and Kashmir in which 40 persons were killed. The Pakistan-based…

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Oil prices: Oil prices rose on 4 March, buoyed by output cuts by producer cartel OPEC and reports that the United States and China are close to a deal to end a bitter tariff row that has slowed global economic growth. Brent futures were at $65.25 a barrel.

US West Texas Intermediate (WTI) crude futures were at $55.94 per barrel, up 14 cents, or 0.3 per cent.

Saudi-Russian cooperation to shape OPEC+: In February, the Saudis tried to create a new…

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Last year ended on a sour note for members of OPEC and their non-OPEC allies with the price of global benchmark Brent crude oil futures falling below $50 per barrel for the first time since mid-2017. Production figures for December show that the 11 OPEC members party to the deal took action even before the agreement came into effect, slashing supply by 850,000 b/d, with Saudi Arabia accounting for 65 percent of the total. Roughly 800,000 b/d more will have to be drained from the market if…

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Political Developments - February 2019

1 Syria: Turkish President Recep Tayyip Erdogan went to Moscow on 23 January with high expectations. He sought President Putin’s backing for a Turkish assault on the Kurds east of the Euphrates, the setting up of a “safe-zone” going 32 km into northern Syria, and the take-over of the Kurdish town of Manbij after the US soldiers leave.

He did not get Russian support on any of these points. Putin made it clear that Syrian unity and sovereignty demanded that the Kurds be…

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On 31 December, crude oil prices rose about 2 percent but were on track for the first annual decline in three years amid lingering concerns of a persistent supply glut. Hints of progress on a possible US-China trade deal, with US President Donald Trump saying he had a "very good call" with Chinese President Xi Jinping, helped bolster sentiment for oil.

Brent crude futures rose $1.04, or about 2 percent, to $54.25 a barrel by 0740 GMT (1:10 pm in India). Brent declined nearly 19…

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Saudi budget and prospects for reform: King Salman approved the government’s $295bn budget for next year on December 18, which he said was “the largest budget in the history of the kingdom of Saudi Arabia”.

Government revenues are forecast to be SR975bn ($260 billion) next year, 9% higher than the figure for this year, but still leaving a deficit of SR131bn (4.2% of GDP). That is slightly lower than the shortfall of SR136bn (4.6% of GDP) for this year, according to…

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Political Developments - January 2019

1. An overview and some prognosis: At the end of 2018, West Asia remains as contentious and violent as it was last year, and its outlook remains as uncertain as before.

The ongoing conflicts in West Asia emerged from a deep sense of strategic vulnerability in Saudi Arabia at the beginning of the current decade in the wake of the Arab Spring. The kingdom then perceived Iranian influence across West Asia as a “Shia Crescent” that embraced Syria, Lebanon, Iraq, Iran…

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Political Developments - December 2018

1. Saudi Arabia: The Khashoggi murder

The murder of Saudi journalist Jamal Khashoggi on 2 October by Saudi officials sent to Turkey for this purpose continued to reverberate through the last month, with Turkey adopting a tough position and Saudi Arabia attempting to distance the crown prince from the deed. US opinion was divided between the White House backing Prince Mohammed bin Salman and upholding the importance US-Saudi ties, while sections of the Congress, US…

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From April onwards, a month before the announcement of sanctions on Iran, President Trump began to criticise OPEC for maintaining high prices and to insist that it increase production; this was clearly aimed at ensuring that moderate prices prevailed despite the withdrawal of Iranian oil from world markets.

In response, Saudi Arabia led OPEC members and their non-OPEC partners in increasing production to record levels. Pressure on Saudi Arabia increased following the Khashoggi murder…

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Political Developments - November 2018

1. The murder of Jamal Khashoggi – domestic and regional implications:

The murder of Saudi journalist Jamal Khashoggi inside the Saudi consulate in Istanbul on 2 October has shocked global opinion, impacted on Saudi-US and Saudi-Turkey ties, and has possibly prepared the ground for major changes in regional political policies and equations.

The bare facts relating to the murder are now well-known: the fifteen murderers, all Saudi nationals,…

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Production surge to control prices:

Last month, US oil futures had climbed to a four-year high near $77 a barrel on growing concerns there could be a shortage as the Iran sanctions bite deeper. Since then, the US has made every effort to maintain price control through a massive boost in domestic production and by urging allies in OPEC to ensure the maximum possible production by the group. While anxious to ensure low prices for the US consumer in general, the Trump…

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Political Developments - October 2018

1. Syria 

Tehran Summit: The leaders of Russia, Turkey and Iran, the co-sponsors of the Astana peace process, met in Tehran on 7 September for their third summit. The leaders had one specific item on their agenda: the fight to liberate Idlib from extremists from Jabhat Al-Nusra and bring this province, the last bastion of the opposition, under the control of President Bashar Assad. The question of Idlib severely tested the unity of the…

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Oil rose to its highest price in four years on 30 September, to $82.72 on Brent, and $ 73.25 on WTI, after Saudi Arabia and Russia downplayed calls from the US to increase production.

Earlier, President Donald Trump had attacked OPEC, saying the 15-member oil organisation should keep crude prices low because of the military protection the US provided for the region. “We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to…

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Political Developments - September 2018

1. President Trump reinstates Iran sanctions: On 6 August, Trump announced the first set of sanctions: there are to be no dollar transactions with Iran, nor can there be imports of Iranian coal, iron, steel, graphite or software used in industrial processes or imports of motor vehicles made in Iran, the country’s largest export item after oil. These sanctions will be followed by more onerous restrictions from 5 November which will target Iran’s oil exports…

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1. Oil prices: On 3 September, oil prices rose due to concerns that falling Iranian output will tighten markets once US sanctions take effect from November, but gains were limited by higher supply from OPEC and the United States. Brent crude oil was up 37 cents at $78.01 a barrel, while WTI was 30 cents higher at $70.10.

Analysts believe that US sanctions are already curbing exports from Iran. A commentator has noted: “Exports from OPEC’s third-biggest producer [Iran]…

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1) Syria: government forces advance in the south: After the success of the government in retaking Aleppo, Homs, Palmyra and finally Ghouta, and securing its capital, the southern campaign began in mid-June as the Bashar Assad regime, already in control of 60 percent of the country, moved to take back the remaining parts from rebel hands.

The south, consisting the provinces of Quneitra, Daraa and Sweida, has more than one million residents of different denominations.…

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Oil prices/ revenues: Through the month, oil prices were affected by the burgeoning trade war between the US and China that might affect global oil demand, the US-Iran war of words, and the attack on the Saudi oil tanker in the Red Sea. At month-end, West Texas Intermediate (WTI) crude for September delivery rose 31 cents to settle at $69.61 a barrel on the New York Mercantile Exchange. Brent for September added 61 cents to end the session at $74.54 a barrel on the…

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1) Iran: Iranian President Hassan Rouhani has sent a list of demands to France, Germany and Britain as its price for staying in the nuclear accord, while vowing not to give in to growing U.S. pressure to curb its oil sales. Iran has said if it cannot reap any economic benefits from remaining in the deal, which traded sanctions relief for curbing the Iranian nuclear program, then it would have little incentive to comply with its terms and would significantly ramp up uranium…

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1) OPEC ministerial (production increase accepted): On 22 June, OPEC ministers announced a deal that will increase oil supplies from the producer group, which has been capping output in order to balance the market and boost prices for the last 18 months. However, no firm figures relating to production increase were announced nor was it indicated how the increases would be allocated among members.
The agreement came after a week of tense negotiation at OPEC's…

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1) Oil prices: The oil ministers of Saudi Arabia, the UAE and Russia met in St Petersburg on 25 May to review the OPEC and non-OPEC decision to cut production that has been in place for 17 months. This finally brought Brent prices to just over $80/barrel in mid-May following the Trump announcement of US withdrawal from the Iran nuclear agreement. Prices had risen in spite of a record US oil production of 10.3 mbd in February. By 25 May, US rig count had gone to 859, the…

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About the Author

Ambassador Talmiz Ahmad joined the Indian Foreign Service in 1974. Early in his career, he was posted in a number of West Asian countries such as Kuwait, Iraq and Yemen and later, between 1987 and 1990, he was Consul General in Jeddah. He also held positions in the Indian missions in New York, London and Pretoria. He served as Indian Ambassador to Saudi Arabia (2000-03; 2010-11); Oman (2003-04), and the UAE (2007-10). He was also Additional Secretary for International Cooperation in the Ministry of Petroleum and Natural Gas in 2004-06. In July 2011, the Saudi Government conferred on him the King Abdul Aziz Medal First Class for his contribution to the promotion of Indo – Saudi relations. After retirement from the Foreign Service in 2011, he worked in the corporate sector in Dubai for three years. He is now a full-time academic and holds the Ram Sathe Chair for International Studies, Symbiosis International University. He has published three books: Reform in the Arab World: External Influences and Regional Debates (2005), Children of Abraham at War: the Clash of Messianic Militarisms (2010), and The Islamist Challenge in West Asia: Doctrinal and Political Competitions after the Arab Spring (2013). He writes and lectures frequently on Political Islam, the politics and economics of West Asia and the Indian Ocean and energy security issues.