Oil giants posturing

Since the collapse of the OPEC+ meetings and in the wake of seismic demand destruction from COVID-19, both Saudi Arabia and Russia have been in a battle of who will blink first with commitments to increase production in the hopes of forcing the other back to the table to recommence production cut discussions. However as of today, there has been no face saving solution for either to MBS or Putin to back down and even Trump's calls to OPEC/Russia...

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Saudi oil optics

The release of the March Official Selling Prices begins to illustrate Saudi Arabia's complex and calculated moves in the global oil markets. After years of trying to figure out the market dynamics of the brave new world with US shale and testing market responses to various signals, it knows that cutting its own production is not the only thing that matters (not to mentioned damaging to its own market share). In fact, targeting data points that...

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Saudi Arabia announces upgrade to oil and gas reserve base

The Ministry of Energy, Industry and Mineral Resources of Saudi Arabia has announced an upward revision to the Kingdom's proven oil and gas reserves, following an independent certification of oil and gas reserves in Saudi Aramco's concession area conducted by leading consultants DeGolyer and MacNaughton (D&M). The Kingdom previously announced that oil and gas reserves as of 31 December 2017 were 266.3 billion barrels of oil and 307.9 trillion standard cubic feet of gas respectively. Of these, the estimated proven oil and gas reserves in Saudi...

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Saudi and Russia dominate gossip columns in run up to June OPEC meeting

As we approach the June OPEC meeting, all eyes on Saudi Arabia and Russia for any clues on the direction they will go on 22nd June. With the sanctions on Iran and imminent collapse of Venezuela, Trump has asked the two power weights to step in to avoid oil prices going any higher. This in itself is ironic as the US has been trying to wean itself off imports and attain energy independence from OPEC, yet it is now openly asking Saudi Arabia to...

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Saudi Arabia: Consolidating power and austerity tested

Earlier this week, Saudi Arabia announced two pieces of news that the oil markets will be keeping a close eye on. In this latest episode of palace intrigue, King Salman has taken further steps to consolidate power in the Salman branch of the royal family and reversed some of the austerity measures implemented in 2016, the latter signalling tears in the fabric of the social contract with the Saudi public. King Salman’s sons, Abdulaziz bin Salman and Khaled bin Salman, will become Minister of State for Energy and Saudi Ambassador to the US respectively. Prince...

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Saudi Arabia: fissures within

King Salman The lack of agreement between members at the 168th OPEC meeting on 4th December means that Saudi Arabia can continue to pursue its strategy of maintaining market share over price for a little longer. In fact, recent production figures show that Saudi Arabia is pumping record amounts of crude this year, a sign of its commitment to this strategy. However, with oil prices reaching recent lows of c.USD40/bbl and little sign of a recovery...

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Saudi Arabia - joining the dots: Part 6 - Emergency meeting

Saudi Arabia - joining the dots is a series of blog entries exploring Saudi Arabia's role in the oil markets with a brief look at the history of the royal family and politics that dictate and influence the Kingdom's oil policy. Part 6 - Emergency meeting OPEC's traditional strategy has been to cut production to maintain prices, but recent behaviour of the cartel or at least that of its largest member (and swing producer) shows a marked deviation...

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Saudi Arabia - joining the dots: Part 5 - Breakeven, OPEC's downfall

Saudi Arabia - joining the dots is a series of blog entries exploring Saudi Arabia's role in the oil markets with a brief look at the history of the royal family and politics that dictate and influence the Kingdom's oil policy. Part 5 - Breakeven, OPEC's downfall The above chart, taken from the Wall Street Journal, paints a grim picture.  It shows the oil price required by the various OPEC members to meet their budgets. As of 10 October...

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Saudi Arabia - joining the dots: Part 4 - The price wars, defending market share

Saudi Arabia - joining the dots is a series of blog entries exploring Saudi Arabia's role in the oil markets with a brief look at the history of the royal family and politics that dictate and influence the Kingdom's oil policy. Part 4 - The price wars, defending market share The sudden fall in the oil price in the middle of 2014 and the subsequent lack of response by OPEC is a stark reminder of its members' policy of defending market share,...

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Saudi Arabia - joining the dots: Part 3 - The reshuffling has begun

Saudi Arabia - joining the dots is a series of blog entries exploring Saudi Arabia's role in the oil markets with a brief look at the history of the royal family and politics that dictate and influence the Kingdom's oil policy. Part 3 - The reshuffling has begun Ali al-Niami's job remains safe...for now In a further move which signals King Salman's tightening grip over the Kingdom's affairs since coming to power,  Salman promoted...

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Saudi Arabia - joining the dots: Part 2 - Scandal

Saudi Arabia - joining the dots is a series of blog entries exploring Saudi Arabia's role in the oil markets with a brief look at the history of the royal family and politics that dictate and influence the Kingdom's oil policy. Part 2 - Scandal In 2006, the then King Abdullah created the Allegiance Council in 2006 to help select future rulers. In March 2014, Prince Muqrin was appointed by Abdullah to be the next in line after Salman, placing...

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Saudi Arabia - joining the dots: Part 1 - The return of the Sudairis

Saudi Arabia - joining the dots is a series of blog entries exploring Saudi Arabia's role in the oil markets with a brief look at the history of the royal family and politics that dictate and influence the Kingdom's oil policy. Part 1 - The return of the Sudairis On Friday 23rd January 2015, King Abdullah passed away paving the way for the Sudairi branch of the Royal Family to consolidate power and strengthen its grip over the country. ...

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