All Posts (91)

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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1. Saudi economy contracts: Saudi Arabia’s economy contracted by 1.03 percent in the second quarter of this year following a 0.5-percent contraction in the first quarter, as participation in the OPEC oil production cut and disappointing growth in non-oil industries weighed on the economy. According to Bloomberg, slow growth in the non-oil economy is insufficient to offset the impact of lower oil output or to reduce unemployment. There has been little momentum in the non-oil…

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Political Developments - November 2017

1. Yemen: The United Nations Human Rights Council decided on 27th September to establish an international team of experts to examine abuses in the Yemen war and seek to identify those responsible. The decision has enabled Saudi Arabia to avoid a formal panel of inquiry like the one investigating the war in Syria.

The United Nations high commissioner for human rights, Zeid Ra’ad al-Hussein, will appoint “a group of eminent international and regional experts” to conduct…

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Political Developments - October 2017

1. Iraq: On 25 September, the Kurds voted overwhelmingly to secede from Iraq and set up an independent state. This referendum had been announced in July by Masoud Barzani, the president of the Kurdistan Regional Government (KRG). Over the last two months, the Iraqi Government headed by Prime Minister Haidar al Abadi made every effort to persuade Barzani to cancel the vote and discuss federal and other issues with Baghdad. These views were echoed by its neighbours, the US,…

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Oil-Related Matters - October 2017

1. Prices show an upturn: Almost nine months after OPEC and its non-OPEC partners implemented production cuts in a bid to rebalance oversupplied markets, tighter supply and demand fundamentals are now supporting prices in a higher $50-55 per barrel range.

Against a backdrop of much stronger oil markets, the OPEC and non-OPEC Joint Ministerial Monitoring Committee (JMMC) concluded its September 22 meeting noted the alliance had reached its highest ever level of…

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Economic Developments - September 2017

Saudi Arabia’s National Transformation Plan (NTP) being changed: The Financial Times has reported that the kingdom’s ambitious NPT, announced last year as heralding a fundamental transformation in the country’s economic sector, is being changed so that more realistic targets and deadlines can be set.

The broader privatisation programme, as well as other initiatives such as providing more affordable housing and reforming the financial sector, will be run outside of the NTP by different…

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Political Developments - September 2017

1. Iran nuclear deal: The US Ambassador to the UN, Nikki Haley, speaking at the American Enterprise Institute (AEI), laid out a detailed argument for why President Donald Trump would be on safe ground if he decides not to certify that Iran is in compliance with the accord limiting its nuclear activity when the decision comes to his desk again next month. She added that the Trump administration would very likely pass on the final decision to the Congress. She went on to say…

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Oil Scenario - September 2017

On 11 September, Saudi energy minister, Khalid al-Falih, was quoted as saying he agreed with other OPEC nations to keep all options open in the organization’s push to re-balance world oil markets, “including the possible extension of output cuts beyond next March.”

Oil prices edged lower on 11 September on concerns that Hurricane Irma’s pounding of heavily populated areas of Florida could dent oil demand in the world’s top oil consuming nation. Goldman Sachs said that oil demand is…

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Political Developments - September 2017

1. Yemen:  The UN envoy to Yemen, Ismail Ould Cheikh Ahmed, is making a last-ditch attempt to convince Houthi rebels to leave the western port city of Hodeida or face a military operation. The UN envoy has recently shuttled between regional capitals to garner support for his recent proposals on Hodeida. 

His plan calls for Hodeida being administered by an all-party group, under the leadership of parties not involved with the fighting.

It has been…

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As Hurricane Harvey hit the US coast, oil analysts said that this could achieve what OPEC had failed to obtain over three years – a tightening of oil supply and the consequent boost to prices.  Harvey hit the coast of Texas on 25 August as the most powerful hurricane to hit the U.S. state in more than 50 years, causing widespread damage and flooding.

The region where the storm struck is home to some 2.2 million barrels per day (bpd) of refining capacity as well as being a major…

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Bloomberg reported on 4 August that Khalid Al-Falih, Saudi Arabia’s energy minister, met in private with some of the world’s top commodity hedge funds in July, taking the unusual step of personally canvassing investor views on the state of the market. Al-Falih is reported to have asked the oil traders why the Organization of Petroleum Exporting Countries (OPEC) had achieved only partial success in reviving the market and what else the group could do to push prices…

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Political Developments - August 2017

1. Qatar: On 30 July, the foreign ministers of the four Arab states that cut ties with Qatar, Saudi Arabia, the UAE, Bahrain and Egypt, met in Bahrain to discuss the diplomatic crisis. It was the second meeting for the foreign ministers since the countries cut diplomatic ties and transport links with Qatar on June 5. After their meeting, the four foreign ministers held a joint press conference, saying that the bloc will continue to keep current measures against Qatar in…

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1. Iran: The principal ongoing debate in political and media circles in the US is the Trump administration’s hostility to Iran and the likelihood that the nuclear agreement with Iran would be unilaterally terminated by the US and that the two countries could even “sleepwalk” into a direct military conflict.

The discussion in the US got sharper from mid-July, the second anniversary of the nuclear agreement, when critics recalled Trump’s description during the…

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A meeting of the Joint Ministerial Monitoring Committee (JMMC), set up to monitor compliance with announced production cuts by participating OPEC and non-OPEC countries, took place in St Petersburg on 24 July. The meeting occurred in the background of increased US oil production, standing at 600,000 b/d, and increases in Nigerian and Libyan production of about 700,000 b/d. At the meeting, Saudi Energy Minister Khalid al-Falih said his country would limit crude exports to 6.6 million barrels…

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India-West Asia ties -- Prime Minister Modi visits Israel: Prime Minister Narendra Modi visited Israel on 4-6 July. This was the first visit by an Indian Prime Minister to Israel and marked the silver jubilee of the establishment of diplomatic ties in 1992. It was also the first time that an Indian leader went to Israel without visiting Ramallah, the headquarters of the Palestinian Authority. This affirmed the bilateral character of the visit and that India’s ties with…

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Political Developments - July 2017

1. Sanctions against Qatar continue: Qatar has been under siege for the past month but it is so far feeling little pain. When four Arab nations, Saudi Arabia, the UAE, Egypt and Bahrain, blockaded Qatar’s airspace and shipping channels last month in a bid to force it to drop its maverick foreign policy and shut down its influential TV station, Al Jazeera, there was an initial burst of panic as some supermarket shelves emptied. But that quickly subsided, and since then…

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1.Total SA and CNPC sign gas development contracts with Iran: Iran signed a formal contract with Total SA and China National Petroleum Corp (CNPC) to develop its share of the world’s biggest natural gas field it shares in Gulf waters with Qatar, the first investment in the country by an international energy company since sanctions were eased last year. In November, Total and CNPC had signed a “heads of agreement” with National Iranian Oil Co. to develop phase 11 of the South…

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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.