Saudi Jumps Hurdles To Deliver OPEC Deal
Bloomberg Businessweek Middle East|December 16, 2018

Saudi Arabia pulled off what many skeptics had thought impossible and implemented oil production cuts

Saudi Jumps Hurdles To Deliver OPEC Deal

Saudi Arabia’s energy minister emerged from days of heated OPEC talks joking that he wasn’t an easy man to be friends with.

Yet, the deal Khalid Al-Falih hammered out to reduce production by 1.2 million barrels a day, which sent oil prices soaring on December 7, was based on Saudi Arabia shouldering the lion’s share of the cuts. It also relied, to an unprecedented extent, on Russia to broker an agreement between the Saudis and their archrivals, Iran, and acknowledged implicitly that there’s little the kingdom could do to hurt surging U.S. oil shale without causing itself pain.

“Saudi economic self-interest trumps Trump,’’ said Mike Rothman, president of Cornerstone Analytics Ltd., a veteran of three decades of OPEC meetings.

The outcome of the marathon talks in Vienna shows how OPEC was able to pull offa juggling act. Al-Falih’s dilemma: cut production and anger President Donald Trump, or let oil prices plunge and risk damage to a Saudi budget that requires oil prices above $70 a barrel in 2019.

“Low prices are actually not good for the U.S. economy,’’ Al-Falih said, a riposte to Trump’s repeated calls for OPEC to open the taps. “I know for a fact that oil and gas producers in the U.S. are probably breathing a sigh of relief that we’re providing some certainty and visibility for 2019.’’

On Twitter on December 5, Trump urged OPEC not to restrict oil flows, but since then has not publicly addressed the market.

For Al-Falih, the willingness to cut production represented a shift. In a speech last year in Houston, he insisted that his country would not surrender market share to the U.S. The kingdom, he said, supported intervening in the market to address “short-term aberrations’’ and not “longterm structural imbalances.’’

Denne historien er fra December 16, 2018-utgaven av Bloomberg Businessweek Middle East.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra December 16, 2018-utgaven av Bloomberg Businessweek Middle East.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA BLOOMBERG BUSINESSWEEK MIDDLE EASTSe alt
Golfing With The Enemy
Bloomberg Businessweek Middle East

Golfing With The Enemy

Did Donald Trump's executives violate the Cuban embargo?

time-read
10+ mins  |
August 16, 2016
Super-Rich Syrians Wait for War's End
Bloomberg Businessweek Middle East

Super-Rich Syrians Wait for War's End

Actor, author, playwright. Gill Pringle tries her hand at unravelling the mystery behind this enigmatic multi-hyphenate

time-read
10+ mins  |
July 01, 2016
Pam Codispoti
Bloomberg Businessweek Middle East

Pam Codispoti

The mastermind behind the industry-shaping Chase Sapphire Reserve Card sets her sights on banking

time-read
2 mins  |
January 16, 2018
This Time It's The Economy
Bloomberg Businessweek Middle East

This Time It's The Economy

President Rouhani’s budget sets offprotests from people angry about unemployment and inflation

time-read
5 mins  |
January 16, 2018
Saudi Prince Counts On Support Of Citizens
Bloomberg Businessweek Middle East

Saudi Prince Counts On Support Of Citizens

State-worker salary increases appeal to the people, but policy may throw the budget off track

time-read
3 mins  |
January 16, 2018
Stalin's Legacy Is Choking The Ukrainian Economy
Bloomberg Businessweek Middle East

Stalin's Legacy Is Choking The Ukrainian Economy

The government has resisted pressure to lift a ban on land sales, despite pressure from the IMF and investors

time-read
4 mins  |
January 16, 2018
Catastrophe Bonds Survive A Stormy Year
Bloomberg Businessweek Middle East

Catastrophe Bonds Survive A Stormy Year

The turbulence of 2017 couldn’t destroy a market for betting against disasters

time-read
3 mins  |
January 16, 2018
Riding The West Bank's Credit Boom
Bloomberg Businessweek Middle East

Riding The West Bank's Credit Boom

Increased consumer lending is creating a bubble in the West Bank

time-read
3 mins  |
January 16, 2018
You'd Be Crazy To Buy Pizza With Bitcoin
Bloomberg Businessweek Middle East

You'd Be Crazy To Buy Pizza With Bitcoin

Speculative fervour makes the cryptocurrency clumsy for commerce

time-read
3 mins  |
January 16, 2018
What If The President Loses His Party?
Bloomberg Businessweek Middle East

What If The President Loses His Party?

Trump has to figure out a way to work with Republicans in Congress, or the global economy may be at stake

time-read
6 mins  |
August 16, 2017