All Posts (87)

1) US-led air attacks on Syria: US forces, backed by France and the UK, launched air attacks on selected targets in Syria in the early hours of 14 April in response to what was described as a chemical weapons attack on civilians in the town of Douma in East Ghouta, a week earlier, that was then under assault by Syrian government forces. Reports of these attacks, backed by gruesome photographs of seriously injured children shown on global media (with the caption “unconfirmed…

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Political Developments- April 2018

1. Death of Indians workers trapped in Mosul confirmed:

On March 20, Minister of External Affairs Sushma Swaraj informed the Rajya Sabha that the 39 Indian workers who had been in the custody of the Islamic State of Iraq and Syria (ISIS) since June 2014 were dead. This announcement ended four years of hope in the hearts of family members that their loved ones still lived, a hope that had survived in spite of persistent reports of ISIS’s intolerance and brutality and…

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1. Oil prices: Oil prices rose on 23 March, pushed up by Saudi statements that OPEC and Russian led production curbs that were introduced in 2017 will need to be extended into 2019 in order to tighten the market. U.S. West Texas Intermediate (WTI) crude futures were at $65.09 a barrel, up 79 cents, or 1.2 percent, from their previous close. Brent crude futures were at $69.64 per barrel, up 73 cents, or 1.1 percent.

2. ARAMCO IPO delayed: Crown Prince…

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Economic Developments - April 2018

1. Saudi Arabia opts for solar power: On 29 March, Softbank and Saudi Arabia reached an agreement to launch a massive solar power project, a 200 gigawatt solar initiative. This is four times the solar capacity in the United States and four times China’s annual pace of solar power expansion. As of the end of 2016, the world as a whole had only installed 303 gigawatts of total solar photovoltaic capacity.

The kingdom will create an electricity company that will…

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1. Syria: Turkish armed forces, backed by their Syrian opposition allies, the Free Syrian Army (FSA), entered Syria on 20 January, and a month later were making slow progress in their attempt to take the northern Syrian town of Afrin from the Kurds under the mis-named “Operation Olive Branch”. At least 31 Turkish soldiers have been killed and several hundred injured, and scores of battle vehicles destroyed. Its Kurdish enemies are already gleefully referring to the campaign…

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1. Oil prices: Oil prices rose on 26 February, hitting three-weeks high, supported by strong U.S. demand and comments from Saudi Arabia that it would continue to curb production in line with OPEC-led efforts. Brent crude rose 19 cents to settle at $67.50 a barrel. U.S. West Texas Intermediate futures rose 36 cents to settle at $63.91 a barrel, after hitting a 20-day high of $64.24.

Prices were supported by Saudi Energy Minister Khalid al-Falih, who said on 24 February…

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India West Asia Ties - March 2018

After his extensive interactions with West Asian countries, the UAE, Saudi Arabia, Iran and Qatar, in 2015-16, and two meetings with Israeli Prime Minister Benjamin Netanyahu, Prime Minister Narendra Modi embarked on his second tour of West Asia on 9-12 February, which took him to Jordan, Palestine, the UAE and Oman. After a quick stopover in Amman, Modi went on a stand-alone visit to Palestine, emphasising that India has “de-hyphenated” its ties with Israel and Palestine and will interact…

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Political Developments - February 2018

1) Syria: US Secretary of State Rex Tillerson announced on 17 January that US forces, numbering about 2000, would remain in Syria. He said this was “crucial to our national defence” and mentioned three reasons: security of Israel; preventing the re-emergence of ISIS, and “expelling malicious Iranian influence” and preventing it from dominating the Middle East. This proposal has evoked sharp criticism from Stephen Kinzer, formerly of the New York Times, who said Tillerson’s…

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The fall in the value of the dollar has boosted oil prices: on 23 January, Brent crude traded at $69.41 a barrel, up 0.54 percent, while WTI crude was at $63.89, up 0.5 percent. Later, on 29 January, WTI crude traded above $66 a barrel, the highest since December 2014. Thanks to shale oil, US crude oil production is poised to break records by surpassing 10m barrels a day in 2018. The country’s net imports of crude oil and petroleum products fell below 2.5m b/d late last year, the lowest…

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1) Saudi economy: On 1 January, Saudi Arabia announced a SR 978 billion ($ 261 billion) budget for 2018, describing it as the largest budget in its history in terms of spending. 
 
The budget, which in the past has been 90 percent dependent on oil revenues, is this year not more than 50 percent based on revenue from oil. The remainder is 30 percent from non-oil revenues, 12 percent from public debt and 8 percent from government…
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Oil Prices - January 2018

At year-end, West Texas Intermediate (WTI) crude futures settled at $60.42, the highest close since June 2015. Brent crude futures were at $66.62 a barrel, after briefly crossing $ 67. This 17 percent rise in Brent prices was supported by ongoing supply cuts by OPEC and Russia as well as strong demand from China.

WTI prices were supported by data from the U.S. Energy Information Administration late on 28 December showing that domestic oil production declined last week to 9.75 million…

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Political Developments - January 2018

1. Iran: On 14 December, the US defence department displayed at a hangar at a joint base at Anacosta-Bolling, Washington, three intact Iranian weapon systems and debris from a fourth, apparently recovered from the battlefields of West Asia. Recalling President Trump’s Iran strategy announced in October, the department spokesperson said these missiles were proof of Iran’s malicious strategy, specifically “evidence of Iranian weapons proliferation in violation of U.N. Security…

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Political Developments - December 2017

1) US President Trump recognises Jerusalem as Israel’s capital: On 6 December, US President Donald Trump announced that the United States would recognise Jerusalem as the capital of Israel and that the US Embassy would be moving to that city. He added that he still supported a two-state solution and this recognition would not affect the final status of the city to be negotiated between Israelis and Palestinians as part of their peace agreement. Trump thus fulfilled his…

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Oil-Related Developments - December 2017

Oil prices moved up on 15 December, lifted by the Forties pipeline outage in the North Sea and ongoing OPEC-led production cuts, although rising output from the United States kept a lid on markets.

U.S. West Texas Intermediate (WTI) crude futures were at $57.28 a barrel, up 26 cents, or 0.5 percent, from their last settlement. Brent crude futures were at $63.47 a barrel, up 16 cents, or 0.25 percent, from their previous close. The ongoing outage of the Forties pipeline, which carries…

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India-West Asia Ties - December 2017

Chabahar port inaugurated: The Chabahar port phase I was inaugurated by Iran’s President Hassan Rouhani on 3 December. It marks an important milestone in India-Iran relations as well as the resolve of Afghanistan and India to look for a viable transit corridor to landlocked Afghanistan, bypassing Pakistan.

Chabahar port is located in the Gulf of Oman along the Makran coast, in the Iranian province of Seistan-Baluchistan, just 75 km from the China-built and operated…

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At a ministerial conclave in Vienna on 30th November, OPEC and some non-OPEC oil ministers agreed to extend production cuts, totalling 1.8 mbd, through to the end of 2018, in a bid to tackle a global glut of crude oil and keep prices buoyant. Following the deal, which ministers hailed as historic and unprecedented, the price of Brent stood at $63.28 a barrel, up 0.27% on the day. WTI crude rose by 10 cents to $57.40.

The extension will be reviewed in June to assess whether the glut of…

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Political Developments - December 2017

1) Developments in Saudi Arabia: Through the last fortnight, updates on the detentions of senior royals, ministers and business persons carried out on 3rd November continued to be reported, though the veracity of many stories cannot be confirmed. Thus, it has been reported that Saudi authorities are striking agreements with some of those detained in an anti-corruption crackdown, asking them to hand over assets and cash in return for their freedom. The deals involve…

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Oil-Related Developments - November 2017

1. Oil prices: Oil prices touched a two-year high on Friday, 10 November, with Brent reaching $ 63.6 and WTI at $ 56.82; prices have risen by about 14% over the last month. Prices have risen due to: drawdown in inventories, especially in the US; better compliance with voluntary production cuts by the Organization of the Petroleum Exporting Countries (OPEC); slower pickup in US shale oil production, and continued geopolitical uncertainty in West Asia following the…

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Political Developments - November 2017

1.  Wide-ranging purge and detentions in Saudi Arabia: On 3 November, in a dramatic coup within the royal family, engineered by King Salman and his son, Crown Prince Mohammed bin Salman, eleven princes, along with four sitting ministers and several former ministers and officials were detained. Prince Miteb bin Abdullah, the commander of the National Guard, the country’s powerful domestic security force, was summarily dismissed and detained, so that force…

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1. Oil prices cross $ 60: Oil prices rose strongly on 26th October before breaking two-year-highs on the next day. Brent crossed $ 60/ barrel to reach $ 60.13, though WTI remained subdued at $ 53.90. The price gains came after robust US demand data from the EIA, reports of declining inventories and rising confidence in an extension of production cuts by OPEC. Some analysts feel this might not be a long-term trend: in recent times, when prices have reached $ 60, they have…

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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.