Saudi Arabia and its Gulf allies held sway in yesterday’s meeting of OPEC: there will be no drop in oil production in order to force prices higher. Saudi Gazette carries this Reuter’s report:
VIENNA (Reuters) — Gulf oil producers on Thursday won the case for keeping OPEC output unchanged, overriding calls from poorer members of the exporters’ group for action to halt a slide in crude prices.
Benchmark Brent crude oil fell $3 to its lowest since September 2010, at under $75 a barrel, on expectations that huge global oversupply will build up in coming months. OPEC also decided to meet next on June 5, 2015.
“It was a great decision,” Saudi Oil Minister Ali Al-Naimi said as he emerged smiling after around five hours of talks.
Asked whether OPEC had decided not to cut production and to roll over existing output policies, he replied: “That is right”.
As OPEC meets in Vienna today, Saudi media are reporting that there will be no decrease in oil production and that the oil market will stabilize itself. With OPEC now controling less than 40% of international oil production, it no longer has the power to unilaterally set prices. The stabilization, though, will come at a price significantly lower than the peak prices seen a while ago and perhaps at just half of what the market bore earlier this year. Oil is currently selling for less than US $80/bbl.
As a result, Arab News reports, Saudi economists are recommending that budgets be planned around an oil price of $40-$50/bbl. That price, a third of peak prices of $145/bbl seen in 2008, will be difficult for some nations to endure. Other countries, such as Saudi Arabia, will manage it, at least in the short- to medium-term due to extensive sovereign wealth funds that can be drawn upon to make up budget shortfalls.
Saudi budget based on $45 oil price ‘ideal’
JEDDAH: P.K. ABDUL GHAFOUR
Saudi economists expect oil prices to decline further in the coming years if producing countries inside and outside the OPEC fail to reach an agreement to stop the downward trend.
They have also advised the government to peg the oil price between $45 and $50 while preparing the national budget for 2015.
“The Organization of Petroleum Exporting Countries alone cannot determine market prices now because it controls only 40 percent of the market and there are several players with conflicting interests,” Ehsan Buhulaiga, a prominent economist, told Arab News.
He emphasized that the budget would not be affected as long as the price stays above $85 per barrel, adding that the country’s huge reserves would offset the budget.
“The lack of solidarity and vision has weakened the OPEC,” he observed.
OPEC ministers are expected to reach a consensus during their meeting in Vienna on Thursday. Petroleum and Mineral Resources Minister Ali Al-Naimi believes the market would stabilize itself.
Asharq Alawsat reports on the planned establishment of a GCC-wide police force, designed to share information across borders. The group will focus on drug trafficking, money laundering, computer and financial crimes, and general cross-border criminality.
As long as the group focuses on mutually and clearly defined crimes, this seems like a natural step to be taking. If it starts getting involved in “crimes” that are really just a matter of political opposition, though, it could get ugly.
Riyadh, Asharq Al-Awsat—Gulf Cooperation Council (GCC) interior ministers have issued guidance on establishing a joint Gulf police force, set to be based in Abu Dhabi, to boost security cooperation among member states. The joint GCC police force has been dubbed a “Gulf Interpol” and will seek to promote GCC efforts to combat cross-border criminal activity in the region.
Under the chairmanship of Kuwaiti Interior Minister Sheikh Mohammad Al-Khalid Al-Sabah, GCC interior ministers held their 33rd general meeting in Kuwait City on Wednesday to discuss regional security issues, including the implementation of a joint police force.
In his inaugural speech at the conference, the Kuwaiti Interior Minister said: “We need to lay down a clear-cut strategy for combating all crimes, particularly drug trafficking and money laundering through a concerted effort.”
“The security services and civil society in each country have to join forces in the fight against such crimes as narcotic addiction, money laundering, cyber-crime and, credit card crimes. No country can address this challenge of organized crime alone,” he added.
Arab News runs a story on a report from Vision of Humanity that says 82% of the victim of terrorism are to be found in Muslim countries. The perpetrators are primarily Muslim.
Most of the 18,000 people killed were in Iraq, Afghanistan, Pakistan, Nigeria, Syria, and Somalia. Deaths in the rest of the world account for only 16.5% of the total.
A staggering 82 percent of terror-related deaths occurred in five Muslim countries, namely Iraq, Afghanistan, Pakistan, Nigeria and Syria, in 2013, according to a report published by the Vision of Humanity Foundation.
There has been a substantial increase in the number of terrorist attacks in 2013, according to the Global Terrorism Index (GTI).
Almost 18,000 people were killed that year, a 61-percent increase from the previous year, the foundation said.
The report pointed out that four organizations — Al-Qaeda, the Taliban, Boko Haram and the Islamic State (IS) — were behind most of the terrorist attacks that year.
“About 90 percent of attacks took place in countries with gross human rights violations,” said the report.
The Gulf Cooperation Council has agreed on a minimum set of contract terms for domestic servants across the six countries, Arab News reports. In addition to setting the hours of work and overtime compensation, the agreement notes that employees are to hold their own passports and will be permitted to live outside their place of work.
Minimum wages were not addressed in the agreement.
GCC labor ministers have agreed on minimum terms in the contracts of domestics to improve the widely criticized working conditions of over 2.4 million foreign maids, an official said.
The move comes as these ministers are to meet with their Asian counterparts in Kuwait City this week to discuss the conditions of foreign labor in the region.
The new contract entitles domestics to a weekly day off, annual leave and the right to live outside their employer’s house, the director general of Kuwait’s Public Manpower Authority, Jamal Al-Dossari, told AFP.
It also limits the working day to eight hours.
Asharq Alawsat reports on the statement by Saudi Arabia’s Ministry of Interior that identified ISIS as the perpetrator of the murderous attack on a Shi’ite gathering in Al-Ahsa that killed seven. Direct orders for the attack were given by ISIS leadership, the Ministry claims.
Riyadh, Asharq Al-Awsat—Saudi Arabia’s Interior Ministry has announced that the Islamic State of Iraq and Syria (ISIS) ordered the attack on a Shi’ite shrine in the small town of Dalwah in the country’s Al-Ahsa governorate earlier this month, which resulted in the deaths of seven Saudi citizens.
Three masked gunmen attacked worshipers at a Shi’ite Husseiniya (meeting house) in the east of the country earlier this month. Riyadh launched a nationwide counterterrorist operation following the attack to track down those responsible, arresting a total of 77 people in successive raids across the country.
The Saudi Interior Ministry announced on Monday that the attack on Dalwah was directly ordered by ISIS, and that the terrorist cell’s leader—as well as three other members of the group—have direct links to the terrorist group that is spreading throughout Iraq and Syria.
Saudi Interior Ministry spokesman Maj. Gen. Mansour Al-Turki said that the unnamed head of the terrorist cell had received specific orders from abroad including the target and timing of the attack.
“ISIS is working to destroy everything that it can to incite fitna and chaos in society and destroy the stability of the Kingdom by targeting innocent citizens, as well as religious figures, government officials and government and security infrastructure,” he said.
“Fitna,” an Arabic term meaning “sedition” or “civil strife,” is often associated with particular religious connotations or conflicts between different religious groups or sects. The attack on Al-Ahsa targeted Saudi Shi’ites, with many observers warning this could set off sectarian violence between Saudi citizens. However, the attack was roundly condemned by Saudi Sunni and Shi’ite religious leaders, who have called for steadfastness and unity in the face of such attacks.
Mshari Al-Zaydi comments on the attack and how it has resulted in a strengthening of national sentiment rather than providing a divisive wedge aimed to split Sunnis from Shi’as within the country. Given the large number of the attackers who had already been arrested for terroristic activities, he suggests that the government may wish to re-evaluate its current approach to dealing with terrorist. Recidivism rates for any rehabilitation program tend to be high, but in the case of terrorism, the costs can be inordinately high.
ISIS and Al-Ahsa
The long-awaited statement from the Saudi Interior Ministry on the attack on the village of Dalwah in the country’s Al-Ahsa province has finally been issued, shedding more light on this horrific crime.
Before we go into this, let me just say that this dangerous crime targeting innocent people in Dalwah sought to incite sectarian conflict in Saudi Arabia. However, it actually ended up having the opposite effect. In the aftermath of the incident we saw popular and official alignment under the banner of national solidarity and the protection of civil peace.
Some well-known figures who have made a habit of sectarian incitement tried via social media to muddy the waters and put forward a false picture of what happened, speculating that this was not a political or terrorist crime, but that it contained personal dimensions. These so-called “preachers” and media figures are like the intellectual writers who appeared during the cultural Sahwa (Islamic Awakening) period in the late 1980s, who thought that what they were doing would make things better, but ultimately had the opposite effect.
It was always clear that the terrorist attack on the village of Dalwah in Al-Ahsa had all the hallmarks of the Islamic State of Iraq and Syria (ISIS). This is something that I said openly at the time, when others would preface talk about this crime by saying, “if it turns out to be a terrorist attack in the first place.” This is nonsense; for if it wasn’t ISIS, then who do they think was responsible? The Japanese Red Army? Basque Separatists?
Al-Arabiya TV, which is owned by the Middle East Broadcasting Center (MBC), writes about new efforts to take down satellite TV stations that run pirated materials. It is estimated that 10% of all Arab satellite broadcasters run programs for which they do not own the rights. This affects those stations that have paid for those materials… to the tune of $10 million/year, according to MBC.
While efforts have been made throughout the region to stop the theft of intellectual property, they have primarily focused on counterfeiting consumer goods and bootleg computer software.
Pirate TV: 47 ‘illegal’ Arab stations taken off air
Ben Flanagan | Al Arabiya News, Abu Dhabi
Almost half the Arab world’s ‘pirate’ TV stations have been taken off air, as legitimate media companies battle a problem they say costs them $100 million a year.
A total of 96 channels that allegedly broadcast pirated material were active in August – accounting for almost 10 per cent of the total number of channels available in the Middle East.
But 47 of these are no longer broadcasting following efforts by an industry coalition dedicated to fighting piracy, said Sam Barnett, chief executive of MBC Group.
“Nobody wants to deal with organized crime, which is what it is,” the executive told Al Arabiya News. “We’re fighting a long battle, but we have had progress.”
Saudi Gazette runs a report from Agence France Presse stating that the Saudi government is extending its buffer zone along the 800-mile border with Iraq by a depth of 20km (12 miles). The area, which is chiefly desert, is being put off limits to Saudi citizens.
RIYADH — Saudi Arabia has expanded a buffer zone along its northern border with Iraq, official media said on Tuesday.
Mohammed Al-Fahimi, a spokesman for northern region border guards, said “the depth of the border has been increased by 20 kilometers (12 miles),” the Saudi Press Agency reported.
Officers guarding the frontier “called on residents and citizens to stay away from the border areas,” it added.
In early September, the Kingdom inaugurated a multi-layered fence, backed by radar and other surveillance tools, along its northern borders.
The spat between Qatar and fellow-GCC members Saudi Arabia, Bahrain, and the UAE seems to be drawing to a close. Asharq Alawsat reports that all three countries are returning their ambassadors to Doha with the expectation that GCC cooperation will resume.
Riyadh and Dammam, Asharq Al-Awsat—Saudi Arabia’s ambassador to Qatar, Abdullah Al-Ayfan, returned to Doha on Monday, following an agreement to end a rift between Qatar and its neighbors earlier this week.
An emergency meeting in Riyadh on Sunday resulted in Gulf Cooperation Council (GCC) members Saudi Arabia, the United Arab Emirates and Bahrain ending their dispute with fellow member-state Qatar, and agreeing to return their ambassadors to the country after a seven-month absence.
Speaking to Asharq Al-Awsat, Ayfan said he was now restarting his work in the Qatari capital, and that all diplomatic relations had returned to normal.
He said he hoped the recent meeting in Riyadh would pave the way for further political and economic cooperation between all GCC countries, leading to what he called a “genuine union” between them, as proposed by the Custodian of the Two Holy Mosques, Saudi King Abdullah Bin Abdulaziz Al Saud.
King Abdullah hosted the Riyadh meeting, which came about due to Saudi–Kuwaiti efforts.
The UNDP marks Saudi Arabia as having jumped from 57th place to 34th place in its 2014 report on global human development, Arab News reports:
The 2014 Human Development Report by the UN Development Program reported that Saudi Arabia achieved a significant progress by ranking in the 34th globally, compared to its previous 57 rank in the UNDP report of 2013. Such a rank boosted its position and qualified the Kingdom to join high human development index countries.
The Kingdom also ranked second on the Arab and Gulf levels, and 10th within the G-20 countries, reflecting a positive development, which the nation must build on to improve its future ranking on the Human Development Index launched in 1990.
An analytical study prepared by the Supreme Economic Council on the realities of Saudi Arabia, included in the human development report 2014 which was entitled
“Sustaining Human Progress, Reducing Vulnerabilities and Building Resilience,” confirmed that despite the improvement made during the march of the economic and social development in the Kingdom, the composite of evidence and the other evidences on the country’s ranking, in addition to the results of opinion polls made on the satisfaction degree concerning the human element, all such factors indicated that the Kingdom’s ranking could be improved and boosted.
Asharq Alawsat reports that those oil producing countries that most need high prices for oil are starting to make their case before the start of an OPEC meeting later this month. Venezuela and Iran in particular are saying that they want OPEC to decrease production in order to drive up prices. They need a price near $100/bbl in order to balance their budgets. The Arab Gulf States can absorb lower prices as their economies are in better shape and they all have sovereign funds they can fall back on to make up any temporary shortfall.
Saudi Arabia would be happy with oil at $100/bbl, but it doesn’t need oil at that price. It can manage well enough with oil priced at $75-$85/bbl. More particularly, it does not want to be told to decrease its oil production while other OPEC countries take smaller or no decreases in their production.
Dubai and Al-Khobar, Reuters/Asharq Al-Awsat—OPEC hawks Iran and Venezuela on Saturday called on fellow crude producers to shore up prices that have plunged more than 30 percent to four-years low ahead of an OPEC meeting later this month.
Oil prices have fallen to below 79 US dollars on abundant and weak demand from 115 dollars a barrel in June. Skepticism that OPEC will cut supply when it meets on November 27 have also weighed on the prices.
So far, only Kuwait and Iran have said a reduction is unlikely, while a Libyan OPEC official, Venezuela and Ecuador have all called for OPEC to cut output.
Privately, some delegates are talking of the need for some action, although they warn an agreement will not be easy to reach.
In comments reported by Iran Oil Ministry’s news agency, Shana, Venezuelan Foreign Minister Rafael Ramírez, speaking in Iran, said Tehran and Caracas hold a common stance on the oil market.
“We believe that the prices are at a very low level and instability in the market is in no one’s interest,” Ramírez told Shana. “A hundred dollars per barrel is the desirable price for Venezuela.”
Iran Oil Minister Bijan Namdar Zanganeh made similar remarks.
Throughout its long history in Saudi Arabia, few have criticized ARAMCO of sitting on its thumbs while the world sped past it. Asharq Alawsat reports that Saudi-ARAMCO is setting up a new Asian subsidiary in Beijing, a recognition that China will be a major importer of Saudi oil into the future. Currently, China imports 19% of its oil from Saudi Arabia.
The article notes, too, how ARAMCO is getting more deeply involved and invested in the US oil market, not as a supplier to US demand, but as a partner in US oil production.
Al-Khobar, Asharq Al-Awsat—After years of operating in Asia through its offices in Hong Kong and South Korea, Saudi Aramco, the Kingdom’s state-owned oil company, is opening a brand new Asian subsidiary, Aramco Asia, setting up shop in the Chinese capital, Beijing.
Structured as a holding company, Aramco Asia will run all its Saudi parent company’s operations in an areas stretching from India in the west to Australia and New Zealand in the east.
According to sources familiar with the plans who spoke to Asharq Al-Awsat on condition of anonymity, the new company will be headed by Ibrahim Al-Buainain, who previously served at Aramco’s offices in Hong Kong and South Korea and headed Saudi Aramco Energy Ventures (SAEV).
SAEV acquired a number of SMEs in the energy sector in the US and elsewhere in a bid to gain more control over international supply chains, especially to the US and Europe.