All Articles (82)

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…

Leading Gulf oil producers Saudi Arabia and Kuwait gave the clearest signal yet that OPEC plans to extend into the second half of the year a deal with non-OPEC producers to curb oil supplies. Consensus is growing among oil producers that their supply restraint agreement should be extended after its initial six-month term, but there is as yet no agreement, Saudi Energy Minister Khalid al-Falih said on 20 April.

Kuwait's oil minister Essam al-Marzouq said he expected to see an extension…

Saudi Arabia to invest in renewable energy:  Saudi Arabia will develop 30 solar and wind projects over the next 10 years as part of the kingdom’s $50 billion program to boost power generation and cut its oil consumption. The country plans to produce 10 percent of its power from renewables by 2023. It also plans to generate an unspecified amount of electricity from nuclear plants.
The country is currently seeking bids to build 700 megawatts of wind and solar power…

Major changes in Saudi Arabia : On 22 April, King Salman bin Abdulaziz issued a series of royal decrees effecting wide-ranging changes in policy matters and appointments to senior positions. These may be summarised as follows:

Saudi Arabia’s new Ambassador to the United States: Prince Khaled bin Salman bin Abdulaziz Al Saud. Born in 1985, he is a former fighter pilot who carried out airstrikes on ISIS in the region. Prince Khaled Bin Salman replaces…

Oil prices remained around $ 52-53 for Brent and $ 49 for WTI during the first days of April. WTI prices were above $ 49 on reports of increased refinery purchases and declining gasoline inventories. Prices were also kept at these levels following reports that OPEC would very likely extend production cuts beyond end-June.

Following the US missile strike in Syria, Brent crude futures jumped to $56.08 per barrel, in what traders called a knee-jerk reaction, before easing to $55.62 per…

1. Yemen: On 31 March, at a conference in Washington, UN Special Envoy Ismail Ould Cheikh Ahmed briefed UN members on the present situation in Yemen and the state of the peace process. He highlighted the deteriorating economic and humanitarian situation, and noted that food insecurity was now affecting 17 million people. He also discussed the plans being made by the pro-Hadi coalition to attack the country’s main port of Hodeidah, which is the principal entry point for…

The fall in oil prices that began on March 7 in response to news of high US inventories has not recovered as US inventories continued on their upward trajectory. Brent prices hovered around $ 51, higher than the low of $ 47 they had reached in mid-March; WTI remained around $ 47.

To boost market confidence, Saudi energy minister, Khalid al Falih, said on 17 March that OPEC and its associates could extend their agreement to cut production beyond 30 June if the global inventory…

Prince Mohammed bin Salman's visit to Washington: Prince Mohammed bin Salman, Saudi deputy crown prince and defence minister, became the first Arab leader to meet President Donald Trump in Washington and have a well-attended lunch with the US president. Official Saudi sources said that the visit marked a "reset" in the US-Saudi relations, after the estrangement of the Obama years. It also marked a turn-around on the part of Donald Trump who, during the election campaign, had…

Over the last month, oil prices initially stayed between $ 55-57 (Brent) and $ 51-53 (WTI). Prices went up to a high of $ 57.31 (Brent) / $ 54.40 (WTI), in response to news relating to effective compliance with production cuts by OPEC and non-OPEC members (90% compliance, the best in OPEC history) and possible extension of the production agreement beyond 30 June.

However, from 11 March, prices started coming down: they briefly touched $ 50.85 (Brent) on 13 March, before closing at $…

Syria: March 15 marked the sixth anniversary of the Syrian conflict. Though the ground situation has shifted in favour of the Assad regime, the conflict shows no sign of ending. 

The Geneva IV conference convened on 23 February, the fourth round of UN-sponsored peace talks in Geneva, coordinated by the UN special envoy, Staffan de Mistura. These talks followed preparatory talks earlier in Astana, Kazakhstan, in January where the six-week long truce in force in…

Yemen: In the Yemen conflict, the most dramatic development was the attack by the Houthis on a Saudi frigate off Hodeidah port, in the Red Sea. It was initially suggested that the attack was from a ballistic missile, but later photographic evidence indicated that it was a suicide assault by two boats laden with explosives. The Saudi authorities said that two crew members were killed. This attack raised questions about possible vulnerabilities of the Saudi navy, given that…

Two developments dominated the global oil scenario: the news of compliance with cuts in production by OPEC and non-OPEC members, and the surge in production of shale oil as a result of prices remaining at above $ 50/barrel in both the WTI and Brent indices: through the last fortnight, Brent was above $ 55, while WTI was above $ 50; on 14 February, Brent was $ 56.14 while WTI was $ 53.38. A report from the IEA said that compliance with cuts to the extent of 90% had been achieved by OPEC and…

The main story relating to oil prices was the confirmation from the participants in the oil production cuts announced in November last year that there had been full compliance with the cuts by all the participating countries. The Saudi energy minister Khalid Al Falih enthused:” Compliance is great –it’s been really fantastic. Based on everything I know, it has been one of the best agreements we’ve had in a long time.”

In separate remarks Al Falih said that the oil market would…

Yemen: The last fortnight brought news of the success of the pro-Hadi government forces along the country's western coast. Commencing their advance from 15 January, government forces announced the capture of the ancient port of Mokha on 23 January. They stated that with this success the ability of Iran to supply the Houthis had been significantly curtailed. By month-end, the government forces also announced that they had control of the road from Mokha to the main port city…

Crown Prince of Abu Dhabi is the chief guest at India's Republic Day:

Sheikh Mohammed bin Zayed Al Nahyan,​ Crown Prince of Abu Dhabi and deputy supreme commander of the UAE armed forces, was the chief guest at India's 68th Republic Day celebrations. This visit marked the culmination of an extraordinary interaction that the Indian Prime Minister, Mr Narendra Modi, has had with the countries of the Gulf, which commenced with his visit to the UAE in August 2015,…

Both UAE and Saudi Arabia were well-represented at the “Vibrant Gujarat” Global Summit in Gandhinagar. The UAE delegation was led by the UAE Minister of State, Dr Rashid Ahmad bin Fahd. At a meeting with Prime Minister Narendra Modi, the UAE chairman of the DP World Group said that UAE had already invested $ 1.2 billion for the development of five ports in India that together handled 30% of the country’s container traffic, and planned to invest another $ 1…

Oil prices 

The main news over the last fortnight was that OPEC members were regularly announcing their compliance with the cuts in production they had agreed to in Vienna in November. In tandem with this, there were reports that oil prices were moving upwards: Brent was usually between $ 56-58/ barrel, while WTI hovered around $ 53. Some analysts suggested that Brent could reach $ 60 over the next few weeks. A poll of oil analysts by Reuters revealed their…

1. Conflict Scenario

While fighting continued in all the three theatres of Iraq, Syria and Yemen, there was no dramatic change in the ground situation. In Iraq, the government forces consolidated themselves in east Mosul and reached the Tigris that divides the city of two million people. But, they made no effort to attack ISIS positions in the west, pointing out that ISIS were putting up a robust fight with snipers, suicide bombers and human shields. Both…

Oil prices 

The OPEC agreement of 30 November to cut output by 1.2 million barrels per day (mbd) and the associated pledge that non-OPEC producers led by Russia would also cut production by another 600,000 b/d from 1 January, 2017, has led to a price rise of over 15%: at end-December, Brent was at $ 55.59, while WTI was $ 53.73. Oil prices received a boost when the OPEC and selected non-OPEC members met in Vienna on 10 December and were able to agree on a…

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.