Tag Archives: SA

Business

Oil steady as Ida outages offset Saudi price cuts

Leave a comment

General view of Aramco tanks and oil pipe at Saudi Aramco’s Ras Tanura oil refinery and oil terminal in Saudi Arabia May 21, 2018. REUTERS/Ahmed Jadallah/File Photo

  • Saudi cuts October prices for Asia by at least $1 a barrel
  • U.S. offshore oil output lags after Ida
  • U.S. oil rig count falls by most since June 2020 -Baker Hughes

NEW YORK, Sept 6 (Reuters) – Oil prices steadied on Monday as gains on production outages after Hurricane Ida were tempered by Saudi Arabia’s sharp cuts to crude contract prices for Asia, reviving concerns over the demand outlook.

Brent crude futures fell 16 cents to $72.45 a barrel by 10:52 a.m. EDT (1452 GMT). U.S. West Texas Intermediate crude fell 12 cents to $69.17 a barrel.

Both contracts had been down by $1 in earlier trade.

State oil group Saudi Aramco notified customers in a statement on Sunday that it will cut October official selling prices (OSPs) for all crude grades sold to Asia, its biggest buying region, by at least $1 a barrel.

The price cuts were larger than expected, based on a Reuters poll of Asian refiners. read more

“When the Saudi giant cuts its selling prices to Asia for October, signaling it sees the supply-demand relationship slightly shifting, traders can’t but follow down that path today,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

Global oil supplies are increasing as the Organization of the Petroleum Exporting Countries and its allies, a grouping known as OPEC+, are raising output by 400,000 barrels per day (bpd) each month between August and December. read more

“Given that OPEC+ is continuing its plan to raise production monthly, despite weak data from China and the U.S. raising slowdown fears and Saudi Arabia looking for market share in the region, oil is likely to remain under pressure,” said Jeffrey Halley, senior market analyst for Asia Pacific at brokerage OANDA.

The earlier decline in crude futures added to falls on Friday after a weaker-than-expected U.S. jobs report indicated a patchy economic recovery that could mean slower fuel demand during a resurgent pandemic. read more

Losses were capped by concerns that U.S. supply would remain limited in the wake of Hurricane Ida.

The U.S. government is releasing crude from strategic petroleum reserves as production in the U.S. Gulf Coast struggles to recover.

About 1.6 million barrels of crude oil remained offline, with only about 100,000 barrels added since Saturday. Another 1.8 billion cubic feet per day of natural gas output also was shut-in. [nL1N2Q70BU]

The hurricane also led U.S. energy companies to cut the number of oil and natural gas rigs operating for the first time in five weeks, data from Baker Hughes showed on Friday. The oil rig count last week fell the most since June 2020.

Reporting by Stephanie Kelly in New York; additional reporting by Julia Payne and Florence Tan
Editing by Jason Neely, David Goodman and Sonya Hepinstall

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

World

Missile attack on Saudi oil region foiled – Saudi-led coalition

Leave a comment

DUBAI, Sept 4 (Reuters) – A ballistic missile attack aimed at Saudi Arabia’s oil-rich eastern region was intercepted on Saturday, the Saudi-led coalition fighting the Houthi group in Yemen said in a statement carried by Saudi state media.

The missile was intercepted over the city of Dammam, according to a source familiar with the matter who declined to be named and social media reports.

The coalition blamed the attack on the Iran-aligned Houthi forces. There was no immediate claim of responsibility in Houthi-run media.

The coalition also said it intercepted and destroyed ballistic missiles heading towards Jazan and Najran, both in the southern part of the country.

The coalition earlier also reported the interception of three explosive-laden drones headed towards the Kingdom.

Eastern Saudi is home to significant oil infrastructure which has previously been targeted and hit by aerial attacks. An attack in September 2019 on two Aramco plants in the east temporarily knocked out half the country’s oil production.

Yemen’s Houthis, who regularly launch drones and missiles into the kingdom, have claimed responsibility for several attacks on Saudi oil installations in the past.

A source familiar with the matter said there was no impact on facilities belonging to state-controlled oil giant Saudi Aramco and that the attack happened outside of Aramco facilities.

The Saudi-led military coalition intervened in Yemen in 2015, backing forces of the ousted government of President Abd-Rabbu Mansour Hadi fighting the Houthis.

Reporting by Maher Chmaytelli and Saeed Azhar; Additional reporting by Nayera Abdallah in Cairo, Writing by Lisa Barrington
Editing by Andrew Cawthorne and Sonya Hepinstall

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

World

Iran plans new round of talks with Saudi Arabia -Iranian envoy

Leave a comment

The Iranian flag waves in front of the International Atomic Energy Agency (IAEA) headquarters, before the beginning of a board of governors meeting, in Vienna, Austria, March 1, 2021. REUTERS/Lisi Niesner

DUBAI, Aug 31 (Reuters) – Iran plans to hold a fourth round of talks with regional rival Saudi Arabia in Iraq after the new Iranian government is set up, the Iranian ambassador in Baghdad was quoted on Tuesday as saying.

Iran and Saudi Arabia, leading Shi’ite and Sunni Muslim powers in the Middle East, have been rivals for years, backing allies fighting proxy wars in Yemen, Syria and elsewhere. They cut diplomatic ties in 2016.

Iran confirmed publicly for the first time in May that it was in talks with Saudi Arabia, saying it would do what it could to resolve issues between them. Since then, it has elected a new president, hardliner Ebrahim Raisi, who was sworn in on Aug. 5.

The announcement of plans for new talks, carried by the semi-official Iranian news agency ISNA, came days after a regional summit held in Baghdad to help ease tensions among Iraq’s neighbours. read more

“We have had three rounds of negotiations with the Saudi side, and the fourth round is to be held after the formation of a new Iranian government,” said Iraj Masjedi, Iran’s ambassador to Iraq, according to ISNA.

Iran’s parliament last Wednesday approved all but one of the nominees for a cabinet of hardliners presented by Raisi. read more

Separately, Iran’s foreign minister said he had discussed ways of improving ties during a meeting with Vice-President Sheikh Mohammed bin Rashid al-Maktoum of the United Arab Emirates on the sidelines of the Baghdad summit.

“In this conversation, we talked about the positive intentions and will of the two countries’ leaders to strengthen relations… Working with neighbours is the (new Iranian) government’s priority,” Foreign Minister Hossein Amirabdollahian said on Twitter.

Tensions rose in Iran’s relations with the UAE after the U.S.-allied Gulf Arab state agreed last year to normalise ties with Tehran’s arch-foe Israel.

Reporting by Dubai newsroom
Editing by Peter Graff and Alistair Bell

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

U.S. calls on OPEC and its allies to pump more oil

Leave a comment

Aug 11 (Reuters) – U.S. President Joe Biden’s top aides are pressuring OPEC and its allies to boost oil output to tackle rising gasoline prices that they see as a threat to global economic recovery.

Biden’s national security adviser Jake Sullivan criticized the world’s major oil producers, including Saudi Arabia, for what he said were insufficient crude production levels in the aftermath of the global COVID-19 pandemic.

“At a critical moment in the global recovery, this is simply not enough,” he said in a statement.

The unusual statement ratcheted up international pressure and comes as the administration tries to contain a range of rising prices and supply bottlenecks across the economy that have fueled inflation concerns.

Biden has made recovering from the economic recession triggered by the pandemic a key priority for his administration.

The message also underscored the new dynamic between Washington and OPEC since Biden’s predecessor, Donald Trump, broke with prior practice in demanding specific policy changes to lower prices. Trump had threatened to withdraw military support from OPEC’s leader Saudi Arabia.

The Biden administration’s push for lower fuel prices comes even as it seeks global leadership in the fight against climate change by encouraging a broad transition away from fossil fuels toward cleaner energy sources and electric vehicles.

Biden’s administration is pressing countries within OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other big producers, “on the importance of competitive markets in setting prices,” Sullivan said. “Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery,” he added. “OPEC+ must do more to support the recovery.”

U.S. retail gasoline prices are running at about $3.18 a gallon at the pumps, up more than a dollar from last year at this time, according to the American Automobile Association.

International benchmark Brent crude was trading at just under $70 a barrel on Wednesday, down 1%.

That is lower than the prices above $77 in early July, but still represents an increase of nearly a third from the beginning of the year.

OPEC+ has been gradually easing a record output cut of 10 million barrels per day, about 10% of world demand, made in 2020 as oil use and prices recover from the pandemic-induced slump. As of July, the cut had been eased to about 5.8 million bpd.

At a meeting held in July, OPEC+ agreed to boost output by 400,000 bpd a month starting in August until the rest of the 5.8 million bpd cut is phased out. OPEC+ is scheduled to hold another meeting on Sept. 1 to review the situation.

The White House on Wednesday also directed the Federal Trade Commission (FTC), which polices anti-competitive behavior in domestic U.S. markets, to investigate whether illegal practices were contributing to higher U.S. gasoline prices.

“During this summer driving season, there have been divergences between oil prices and the cost of gasoline at the pump,” Biden’s top economic aide, Brian Deese, wrote in a letter to FTC chair Lina Khan.

He encouraged the FTC to “consider using all of its available tools to monitor the U.S. gasoline market and address any illegal conduct.”

Reporting by Trevor Hunnicutt; Additional reporting by Susan Heavey and Aakriti Bhalla; Editing by David Evans and Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

World

De facto UAE leader visits Saudi crown prince amid tensions

Leave a comment

DUBAI, July 19 (Reuters) – The United Arab Emirates’ de facto ruler held talks in the Saudi capital Riyadh on Monday with Saudi Crown Prince Mohammed bin Salman, at a time of tensions between the two Gulf allies that led this month to an open standoff over oil policy.

“My brother Mohammed bin Salman and I discussed ways to further deepen the fraternal bond and strategic cooperation between our nations. The partnership between the UAE and Saudi Arabia continues to be strong and prosperous,” Abu Dhabi Crown Prince Mohammed bin Zayed al-Nahyan tweeted.

A public dispute between the two states this month disrupted policy setting by OPEC+, an oil producers’ group that comprises OPEC and a number of allies. On Sunday, OPEC+ secured agreement to boost oil supplies after the two Gulf producers reached an understanding. read more

Analysts say increasing economic competition is laying bare differences between Saudi Arabia and the UAE as the kingdom tries to challenge its smaller neighbour’s dominance as the region’s business, trade and tourism hub.

Reporting by Lisa Barrington; Editing by Kevin Liffey

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

Business

Saudi Arabia pushes back on UAE opposition to OPEC+ deal

Leave a comment

DUBAI, July 4 (Reuters) – Saudi Arabia’s energy minister pushed back on Sunday against opposition by fellow Gulf producer the United Arab Emirates to a proposed OPEC+ deal and called for “compromise and rationality” to secure agreement when the group reconvenes on Monday.

It was a rare public spat between allies whose national interests have increasingly diverged, spilling over into OPEC+ policy setting at a time consumers want more crude to aid a global recovery from the COVID-19 pandemic.

OPEC+, which groups the Organization of the Petroleum Exporting Countries and its allies, voted on Friday to raise output by some 2 million barrels per day from August to December 2021 and to extend remaining cuts to the end of 2022, but UAE objections prevented agreement, sources had said. read more

“The extension is the basis and not a secondary issue,” Saudi Energy Minister Prince Abdulaziz bin Salman told Saudi-owned Al Arabiya television channel.

“You have to balance addressing the current market situation with maintaining the ability to react to future developments … if everyone wants to raise production then there has to be an extension,” he said, noting uncertainty about the course of the pandemic and output from Iran and Venezuela.

The UAE said on Sunday it backs an output increase from August but suggested deferring to another meeting the decision on extending the supply pact. It said baseline production references – the level from which any cuts are calculated – should be reviewed for any extension. read more

The standoff could delay plans to pump more oil through to the end of the year to cool oil prices.

“Big efforts were made over the past 14 months that provided fantastic results and it would be a shame not to maintain those achievements. … Some compromise and some rationality is what will save us,” the Saudi energy minister said.

“We are looking for a way to balance the interests of producer and consumer countries and for market stability in general, especially when shortages are expected due to the decrease in stockpiles,” he added.

Responding to oil demand destruction caused by the COVID-19 pandemic, OPEC+ agreed last year to cut output by almost 10 million bpd from May 2020, with plans to phase out the curbs by the end of April 2022. Cuts now stand at about 5.8 million bpd.

OPEC+ sources said the UAE contended its baseline was originally set too low, but was ready to tolerate if the deal ended in April 2022. The UAE has ambitious production plans and has invested billions of dollars to boost capacity.

Prince Abdulaziz, who stressed Riyadh’s “sacrifice” in making voluntary cuts, said no country should use a single month as a baseline reference, adding there was a mechanism to file objections and that “selectivity is difficult”.

The regional alliance that saw Saudi Arabia and the UAE join forces to project power in the Middle East and beyond — coordinating use of financial clout and, in Yemen, military force — has loosened as national interests came to the fore.

Abu Dhabi extricated itself from the Yemen war in 2019, saddling Riyadh. Saudi Arabia this year took the lead to end a row with Qatar despite reluctance from its Arab allies.

The kingdom has also moved to challenge the UAE’s dominance as the region’s business and tourism hub as Riyadh vies for foreign capital to diversify its economy away from oil.

Reporting by Marwa Rashad in London, Ghaida Ghantous in Dubai and Alaa Swilam in Cairo; Writing by Ghaida Ghantous; Editing by Hugh Lawson, Peter Cooney and Daniel Wallis

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

World

EXCLUSIVE New Saudi airline plan takes aim at Emirates, Qatar Airways

Leave a comment

DUBAI, July 2 (Reuters) – Saudi Arabia plans to target international transit passenger traffic with its new national airline, going head-to-head with Gulf giants Emirates and Qatar Airways and opening up a new front in simmering regional competition.

Crown Prince Mohammed bin Salman, who is pushing economic diversification to wean Saudi Arabia off oil revenues and create jobs, announced a transportation and logistics drive on Tuesday aimed at making the kingdom the fifth-biggest air transit hub.

Two people familiar with the matter said the new airline would boost international routes and echo existing Gulf carriers by carrying people from one country to another via connections in the kingdom, known in the industry as sixth-freedom traffic.

The transport ministry, which has not released details of the plans, did not respond to a Reuters request for comment.

The strategy marks a shift for Saudi Arabia whose other airlines, like state-owned Saudia and its low cost subsidiary flyadeal, mostly operate domestic services and point-to-point flights to and from the country of 35 million people.

The Saudi expansion threatens to sharpen a battle for passengers at a time when travel has been hit by the coronavirus pandemic. Long-haul flights like those operated by Emirates and Qatar Airways are forecast to take the longest to recover.

Riyadh has already moved to compete with the UAE, the region’s business, trade and tourism hub. The Saudi government has said that from 2024 it would stop giving contracts to firms that do not set up regional headquarters in the kingdom.

“Commercial competition in the aviation industry has always been fierce, and regional competition is heating up. Some turbulence in regional relations is on the horizon,” said Robert Mogielnicki, resident scholar at the Arab Gulf States Institute.

Dubai, the world’s largest international air travel hub, has announced a five-year plan to grow air and shipping routes by 50% and double tourism capacity over the next two decades.

Riyadh has already moved to compete with the UAE, the region’s business, trade and tourism hub. The Saudi government has said that starting 2024 it would stop giving contracts to firms that do not set up regional headquarters in the kingdom.

Saudi Crown Prince Mohammed bin Salman attends a session of the Shura Council in Riyadh, Saudi Arabia, November 20, 2019. Bandar Algaloud/Courtesy of Saudi Royal Court/Handout via REUTERS

Read More

Prince Mohammed is trying to lure foreign capital to create new industries including tourism, with ambitions to increase overall visitors to 100 million by 2030 from 40 million in 2019.

“Saudi Arabia has the ability to push forward with its aviation and tourism strategy when others will be retreating and retracting,” aviation consultant Brendan Sobie said.

“It is a risky strategy, but also sensible given its position and overall diversification objective.”

TOURISM PUSH

However, any airline requires substantial start-up capital and experts warn that if Saudi Arabia’s ambition is to compete on transit flights it may have to contend with years of losses.

Saudi Arabia’s large population generates direct traffic that could cushion losses as a new airline targets international transit traffic, aviation consultant John Strickland said.

Emirates reported a record $5.5 billion annual loss last month with the pandemic forcing Dubai to step in with $3.1 billion in state support.

Etihad Airways has scaled back its ambitions after it spent billions of dollars to ultimately unsuccessfully compete in building a major hub in United Arab Emirates capital Abu Dhabi.

People familiar with the matter said the new airline could be based in the capital Riyadh, and that sovereign wealth fund PIF is helping set it up.

PIF did not respond to a request for comment.

Saudi Arabia is developing non-religious tourism with mega projects backed by PIF. It has launched social reforms to open up the country, the birthplace of Islam, including allowing public entertainment.

Reporting by Alexander Cornwell; Editing by Tim Hepher and Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

Read original article here

World

Saudi Arabia plans new national airline as it diversifies from oil

Leave a comment

CAIRO, June 29 (Reuters) – Saudi Arabia’s Crown Prince Mohammed bin Salman announced plans on Tuesday to launch a second national airline as part of a broader strategy to turn the kingdom into a global logistics hub as it seeks to diversify from oil.

The creation of another flag carrier would catapult Saudi Arabia into the 5th rank globally in terms of air transit traffic, official state media reported, without giving details on when and how the airline would be created.

Prince Mohammad has been spearheading a push for Saudi Arabia, the biggest Arab economy and the largest country in the Gulf geographically, to boost non-oil revenues to about 45 billion riyals ($12.00 billion) by 2030.

Making the kingdom a global logistics hub, which includes the development of ports, rail and road networks, would increase the transport and logistics sector’s contribution to gross domestic product to 10% from 6%, state news agency SPA said.

“The comprehensive strategy aims to position Saudi Arabia as a global logistics hub connecting the three continents,” Prince Mohammed was quoted as saying in the SPA report.

“This will help other sectors like tourism, haj and umrah to achieve their national targets.”

The addition of another airline would increase the number of international destinations from Saudi Arabia to more than 250 and double air cargo capacity to more than 4.5 million tonnes, the SPA report said.

With current flag bearer Saudi Arabian Airlines (Saudia), the kingdom has one of the smallest airline networks in the region relative to its size. Saudia has struggled with losses for years and like global peers, has been hit hard by the coronavirus pandemic.

Local media reported earlier this year that the kingdom’s sovereign wealth fund, the Public Investment Fund, (PIF), planned to build a new airport in Riyadh as part of the new airline launch, without giving further details.

The fund is the main vehicle for boosting Saudi Arabian investments at home and abroad as the young prince, known in the West as MbS, seeks to diversify the kingdom’s oil-heavy economy through his Vision 2030 strategy.

($1 = 3.7503 riyals)

Reporting by Nayera Abdallah and Alaa Swilam; Writing by Ghaida Ghantous and Marwa Rashad; Editing by Sonya Hepinstall, Marguerita Choy and Jane Wardell

Our Standards: The Thomson Reuters Trust Principles.

Read original article here