All Articles (80)

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…

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…

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…

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…

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…

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…

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…

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…

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…

1. FDI into GCC countries: The “World Investment Report 2017” provides a mixed picture on foreign direct investments (FDIs) into the Gulf countries. GCC economies collectively attracted about $20.9 billion in 2016, down from $23.3 billion in 2015. The figures for 2014 and 2013 are $20.7 billion and $22.5 billion, respectively. The combined inflows into the GCC are not significant by global standards — India alone enticed about $45 billion of FDIs in 2016.

The…

A weekly report by the Energy Information Administration (EIA) on 21 June said crude inventories had fallen 2.5 million barrels and gasoline stockpiles slipped 0.6 million barrels. But, it also noted that petroleum in storage was still plentiful and that gasoline was above the upper limit of the average range for this time of year. Following this report, the price of the benchmark WTI crude fell to $42.34 a barrel, down 2.69 percent, far below its price of $54.45 a barrel in February. The…

1. King Salman bin Abdulaziz appoints his son as crown prince: In a dramatic announcement from the royal palace on 21 June, Saudi ruler, King Salman bin Abdulaziz appointed his son, Prince Mohammed bin Salman, deputy crown prince, as the crown prince, removing the incumbent, Prince Mohammed bin Nayef. While it has been apparent for the last two years, ever since King Salman became the ruler in January 2015, that his son’s authority and influence was increasing steadily, the…

Oil prices rebounded sharply in volatile trade on 13 June after earlier edging down as OPEC reported an increase in its production for May despite a supply cut agreement. Brent crude futures were at $48.49 per barrel, up 20 cents, while WTI was at $46.31 per barrel, up 23 cents.

Prices initially nudged higher in early morning trade after the world's top exporter Saudi Arabia outlined cuts to customers in July that included a reduction of 300,000 barrels per day (bpd) to Asia. But,…

1. Saudi Arabia and its allies break ties with Qatar: On 5 June, Saudi Arabia, the UAE, Bahrain, Egypt and Yemen snapped diplomatic ties with Qatar, accusing the island nation of supporting terrorist groups, including Al Qaeda, the Islamic State and those backed by Iran, and destabilising the region. Qatar’s partners in the Gulf Cooperation Council (GCC) have also blocked all transport and communication links with Qatar and asked its nationals to leave within two…

Iran receives French civilian aircraft:  Four ATR 72-600s are being delivered to Iran, the first instalment of a deal with the French manufacturer to purchase 20 passenger planes following the lifting of sanctions under the 2015 nuclear deal.

The first plane landed in Tehran on 17 May, with the other three expected later in the day. The planes were officially given to Iran Air in a ceremony on Tuesday in Toulouse, where ATR is based. Iran Air finalized a deal…

OPEC and other oil producers agreed at their Ministerial in Vienna on 25 May to an extension of supply cuts for nine months, up to the end of March 2018. Libya and Nigeria are exempt from the cuts, while Iran is permitted to retain its output target.

This meeting was preceded by hectic Saudi consultations with member- and non-member countries. On the eve of the Ministerial, Saudi minister of energy, Khalid A al-Falih had said that most participants are on board with the plan to rein…

1. Trump in West Asia: President Donald Trump visited Saudi Arabia and Israel on 21-24 May. In Riyadh, he had three summit meetings: a bilateral interaction with King Salman bin Abdulaziz; a meeting with leaders from the Gulf Cooperation Council countries, and a third summit with leaders of selected Muslim member-countries of the Organisation of Islamic Cooperation (OIC), said to number 55; Iran and Syria were not invited.

The Saudi-US joint statement reflected…

Saudi economic scenario: In an interview with Bloomberg, Saudi Arabia’s vice minister of economy and planning, Mohammed Al Tuwaijri made the following main points:

(i) Sale of international bonds: Al Tuwaijri said that the finance ministry’s debt management office may decide to tap the market in the fourth quarter this year. The size of the issuance will depend on market conditions and investor appetite but could potentially be as much as $10 billion.…

The oil price scenario remained volatile largely because the OPEC and non-OPEC cuts in production, announced in November last year, have failed to make a major dent in oil inventories, even as US rig counts have continued to increase steadily. Oil prices fell to their lowest in six months on 5 May, when Brent went to $ 45. Both Brent and WTI rose sharply to over $ 48 (Brent) and over $ 45 (WTI), following Saudi Arabia’s OPEC governor’s statement that: “There’s an emerging consensus among…

1. Syria: The month began with news that President Putin and the leaders of Iran and Turkey had on 4 May agreed on the setting up of four “safe zones” in Syria, later referred to as “de-escalation” zones; these are: the city of Idlib, held by militia led by the Al Qaeda-affiliated Jabhat Nusra since mid-2015; north of the city of Homs, where the Turkish-backed Free Syrian Army (FSA) is dominant; the eastern countryside of Damascus, Al Ghouta, controlled by the Saudi-backed…

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.