All Posts (85)

On 31 December, crude oil prices rose about 2 percent but were on track for the first annual decline in three years amid lingering concerns of a persistent supply glut. Hints of progress on a possible US-China trade deal, with US President Donald Trump saying he had a "very good call" with Chinese President Xi Jinping, helped bolster sentiment for oil.

Brent crude futures rose $1.04, or about 2 percent, to $54.25 a barrel by 0740 GMT (1:10 pm in India). Brent declined nearly 19…

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Saudi budget and prospects for reform: King Salman approved the government’s $295bn budget for next year on December 18, which he said was “the largest budget in the history of the kingdom of Saudi Arabia”.

Government revenues are forecast to be SR975bn ($260 billion) next year, 9% higher than the figure for this year, but still leaving a deficit of SR131bn (4.2% of GDP). That is slightly lower than the shortfall of SR136bn (4.6% of GDP) for this year, according to…

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Political Developments - January 2019

1. An overview and some prognosis: At the end of 2018, West Asia remains as contentious and violent as it was last year, and its outlook remains as uncertain as before.

The ongoing conflicts in West Asia emerged from a deep sense of strategic vulnerability in Saudi Arabia at the beginning of the current decade in the wake of the Arab Spring. The kingdom then perceived Iranian influence across West Asia as a “Shia Crescent” that embraced Syria, Lebanon, Iraq, Iran…

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Political Developments - December 2018

1. Saudi Arabia: The Khashoggi murder

The murder of Saudi journalist Jamal Khashoggi on 2 October by Saudi officials sent to Turkey for this purpose continued to reverberate through the last month, with Turkey adopting a tough position and Saudi Arabia attempting to distance the crown prince from the deed. US opinion was divided between the White House backing Prince Mohammed bin Salman and upholding the importance US-Saudi ties, while sections of the Congress, US…

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From April onwards, a month before the announcement of sanctions on Iran, President Trump began to criticise OPEC for maintaining high prices and to insist that it increase production; this was clearly aimed at ensuring that moderate prices prevailed despite the withdrawal of Iranian oil from world markets.

In response, Saudi Arabia led OPEC members and their non-OPEC partners in increasing production to record levels. Pressure on Saudi Arabia increased following the Khashoggi murder…

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Political Developments - November 2018

1. The murder of Jamal Khashoggi – domestic and regional implications:

The murder of Saudi journalist Jamal Khashoggi inside the Saudi consulate in Istanbul on 2 October has shocked global opinion, impacted on Saudi-US and Saudi-Turkey ties, and has possibly prepared the ground for major changes in regional political policies and equations.

The bare facts relating to the murder are now well-known: the fifteen murderers, all Saudi nationals,…

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Production surge to control prices:

Last month, US oil futures had climbed to a four-year high near $77 a barrel on growing concerns there could be a shortage as the Iran sanctions bite deeper. Since then, the US has made every effort to maintain price control through a massive boost in domestic production and by urging allies in OPEC to ensure the maximum possible production by the group. While anxious to ensure low prices for the US consumer in general, the Trump…

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Political Developments - October 2018

1. Syria 

Tehran Summit: The leaders of Russia, Turkey and Iran, the co-sponsors of the Astana peace process, met in Tehran on 7 September for their third summit. The leaders had one specific item on their agenda: the fight to liberate Idlib from extremists from Jabhat Al-Nusra and bring this province, the last bastion of the opposition, under the control of President Bashar Assad. The question of Idlib severely tested the unity of the…

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Oil rose to its highest price in four years on 30 September, to $82.72 on Brent, and $ 73.25 on WTI, after Saudi Arabia and Russia downplayed calls from the US to increase production.

Earlier, President Donald Trump had attacked OPEC, saying the 15-member oil organisation should keep crude prices low because of the military protection the US provided for the region. “We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to…

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Political Developments - September 2018

1. President Trump reinstates Iran sanctions: On 6 August, Trump announced the first set of sanctions: there are to be no dollar transactions with Iran, nor can there be imports of Iranian coal, iron, steel, graphite or software used in industrial processes or imports of motor vehicles made in Iran, the country’s largest export item after oil. These sanctions will be followed by more onerous restrictions from 5 November which will target Iran’s oil exports…

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1. Oil prices: On 3 September, oil prices rose due to concerns that falling Iranian output will tighten markets once US sanctions take effect from November, but gains were limited by higher supply from OPEC and the United States. Brent crude oil was up 37 cents at $78.01 a barrel, while WTI was 30 cents higher at $70.10.

Analysts believe that US sanctions are already curbing exports from Iran. A commentator has noted: “Exports from OPEC’s third-biggest producer [Iran]…

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1) Syria: government forces advance in the south: After the success of the government in retaking Aleppo, Homs, Palmyra and finally Ghouta, and securing its capital, the southern campaign began in mid-June as the Bashar Assad regime, already in control of 60 percent of the country, moved to take back the remaining parts from rebel hands.

The south, consisting the provinces of Quneitra, Daraa and Sweida, has more than one million residents of different denominations.…

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Oil prices/ revenues: Through the month, oil prices were affected by the burgeoning trade war between the US and China that might affect global oil demand, the US-Iran war of words, and the attack on the Saudi oil tanker in the Red Sea. At month-end, West Texas Intermediate (WTI) crude for September delivery rose 31 cents to settle at $69.61 a barrel on the New York Mercantile Exchange. Brent for September added 61 cents to end the session at $74.54 a barrel on the…

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1) Iran: Iranian President Hassan Rouhani has sent a list of demands to France, Germany and Britain as its price for staying in the nuclear accord, while vowing not to give in to growing U.S. pressure to curb its oil sales. Iran has said if it cannot reap any economic benefits from remaining in the deal, which traded sanctions relief for curbing the Iranian nuclear program, then it would have little incentive to comply with its terms and would significantly ramp up uranium…

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1) OPEC ministerial (production increase accepted): On 22 June, OPEC ministers announced a deal that will increase oil supplies from the producer group, which has been capping output in order to balance the market and boost prices for the last 18 months. However, no firm figures relating to production increase were announced nor was it indicated how the increases would be allocated among members.
The agreement came after a week of tense negotiation at OPEC's…

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1) Oil prices: The oil ministers of Saudi Arabia, the UAE and Russia met in St Petersburg on 25 May to review the OPEC and non-OPEC decision to cut production that has been in place for 17 months. This finally brought Brent prices to just over $80/barrel in mid-May following the Trump announcement of US withdrawal from the Iran nuclear agreement. Prices had risen in spite of a record US oil production of 10.3 mbd in February. By 25 May, US rig count had gone to 859, the…

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1) President Trump withdraws the US from the Iran nuclear agreement: On 8 May, President Donald Trump finally withdrew the US from the nuclear agreement that his predecessor, along with other world powers, had signed with Iran in January 2016. Iran had then agreed to end its nuclear weapons programme in return for the lifting of economic sanctions on oil sales, trade and financial transactions that had crippled its economy and had made it a pariah in regional and world…

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1) President Trump on OPEC: Donald Trump launched an attack on OPEC on 20 April for pushing oil markets to the highest level since 2014, saying that crude prices have been driven up “artificially” by the cartel. The US president’s statement, made in one of his customary early morning tweets, followed comments by Saudi Arabia’s energy minister that the world economy could cope with higher oil prices, as crude approached $75 a barrel.

Mr Trump’s comments will be seen as…

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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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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.