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Dubai, May 7: Saudi Arabia will emerge as the victor of the oil price war that sent global crude markets into a spin last month, according to two experts in the energy industry.

Jason Bordoff, professor and founding director of the Center for Global Energy policy at New York’s Columbia University, said: “While 2020 will be remembered as a year of carnage for oil nations, at least one will most likely emerge from the pandemic stronger, both economically and geopolitically: Saudi Arabia.”

Writing in the American publication Foreign Policy, Bordoff said that the Kingdom’s finances can weather the storm from lower oil prices as a result of the drastically reduced demand for oil in economies under pandemic lockdowns, and that it will end up with higher oil revenues and a bigger share of the global market once it stabilizes.

Bordoff’s view was reinforced by Sir Mark Moody-Stuart, former chairman of Royal Dutch Shell and one of the longest-standing directors of Saudi Aramco. In an interview with the Gulf Intelligence energy consultancy, he said that low-cost oil producers such as Saudi Arabia would emerge from the pandemic with increased market share.

“Oil is the only commodity where the lowest-cost producers have contained their production and allowed high-cost producers to benefit. When demand recovers this year or next, we will emerge from it with the lowest-cost producers having increased their market share,” Moody-Stuart said.

Bordfoff said that it would take years for the high-cost American shale industry to recover to pre-pandemic levels of output. “Depending on how long oil demand remains depressed, US oil production is projected to decline from its pre-coronavirus peak of around 13 million barrels per day.

“Shale's heady growth in recent years (with production growing by about 1 million to 1.5 million barrels per day each year) also reflected irrational exuberance in financial markets. Many US companies struggling with uneconomical production only managed to stay afloat with infusions of cheap debt. One quarter of US shale oil production may have been uneconomic even before prices crashed,” he said.

Moody-Stuart said that recent statements about cuts to the Saudi Arabian budget as a result of falling oil revenues were “an important step to wean the population of the Kingdom off an entitlement feeling. It means that everybody is joining in it.”

The former Shell boss said that other big oil companies would follow Shell’s recent decision to cut its dividend for the first time in more than 70 years. But he added that Aramco would stick by its commitment to pay $75 billion of dividends this year.

“When a company looks at its forecasts it looks ahead for one year, so for this year it (the dividend) is fine,” he said.

Bordoff added that Saudi Arabia’s action in cutting oil production in response to the pandemic would improve its global position.

“Saudi Arabia has improved its standing in Washington. Following intense pressure from the White House and powerful senators, the Kingdom’s willingness to oblige by cutting production will reverse some of the damage done when it was blamed for the oil crash after it surged production in March,” he said.

“Only a few weeks ago, the outlook for Saudi Arabia seemed bleak. But looking out a few years, it’s difficult to see the Kingdom in anything other than a strengthened position,” Bordoff said.

Apr 20: Eight Indians, including two engineers, have died due to the novel coronavirus in Saudi Arabia, according to a media report on Sunday.

Mohammed Aslam Khan, an electrical engineer in Makkah, and Azmatullah Khan, an engineer at the Makkah Haram power station, have died due to the COVID-19, Saudi Gazette reported.

Aslam Khan, aged 51, who hailed from Meerut in Uttar Pradesh, was admitted to King Faisal Hospital, Makkah on April 3, following worsening of his condition after being infected with fever and throat pain.

He had been on ventilator for more than two weeks and breathed his last on Saturday night, the paper said.

Khan is survived by wife and a daughter and a son. His wife and children are under self-imposed home quarantine.

Azmatullah Khan, from Telangana, died of coronavirus on Friday.

Mujeeb Pukkottoor, a prominent Indian social worker and general secretary of Makkah chapter of Kerala Muslim Cultural Center, told the paper that the body of Khan was buried in Makkah on Sunday.

Khan, aged 65, had been working with Saudi Binladin Group for the last 32 years.

Fakre Alam, an employee at the Haram Project of Saudi Binladin Group in Makkah, died on Sunday due to infection, the paper said.

Barkt Ali Abdullatif Fakir, an electrical technician working in Medina, also died of coronavirus, it said.

According to the Saudi Ministry of Health’s daily report published on April 14, the number of coronavirus infected cases among workers of Saudi Binladin Group in various parts of the Kingdom stood at 117, and these included 70 cases in Makkah.

The first two Indian fatalities were reported from Medina and Riyadh earlier this month with the death of Shebnaz Pala Kandiyil (29) and Safvan Nadamal (41), both from Kerala.

Mohammed Sadiq, from Hyderabad, working in Jeddah and Suleman Sayyid Junaid (Maharashtra) are other Indians who died due to COVID-19 in the Gulf kingdom, the paper said.

Shebnaz from Panoor in Kannoor district died on April 3 and his body was buried in Medina on April 7. He came back to the Kingdom March 3 after his marriage in January.

Safvan, a taxi driver from Chemmad in Malappuram district, died on April 2 and was buried in Riyadh on April 8.