All Posts (87)

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,…

Read more…

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…

Read more…

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…

Read more…

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…

Read more…

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…

Read more…

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…

Read more…

Economic Developments - May 2017

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.…

Read more…

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…

Read more…

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…

Read more…

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…

Read more…

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…

Read more…

Political Developments - April 2017

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…

Read more…

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…

Read more…

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…

Read more…

Political Developments - March 2017

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…

Read more…

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 $…

Read more…

Oil-Related Developments - February 2017

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…

Read more…

Oil-Related Developments - February 2017

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…

Read more…

Political Developments - February 2017

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…

Read more…

India-Gulf Ties - February 2017

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,…

Read more…

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.