New Saudi king seen holding line on OPEC policy to keep oil output high

January 23, 2015

New Saudi king

Singapore, Jan 23: Saudi Arabia’s new king is expected to stick to an OPEC policy of keeping oil output steady to protect the cartel’s market share from rival producers, even as energy markets face some of the biggest shifts in decades.

Saudi Arabia’s King Abdullah died early on Friday and his brother Salman became king, the royal court said in an official statement.

Salman has named his half-brother Muqrin as his crown prince and heir, rapidly moving to forestall any fears of a succession crisis at a moment when Saudi Arabia faces unprecedented turmoil on its borders.

The new king is expected to broadly continue Abdullah’s policies, analysts say.

“King Abdullah was the architect of the current strategy to keep production high and force out smaller players instead of cutting,” said John Kilduff, partner, Again Capital LLC in New York.

Kilduff said that Salman was known as a defender of Saudi Arabia’s interests and that the market would expect him to keep production high.

FGE analyst Tushar Bansal said: “By and large, as of now no major change is expected in Saudi policies” but he said the market would focus on whether Saudi Arabia’s oil minister might be replaced.

“Ali Al Naimi has been the oil minister since 1995.

Previously, it was reported that he expressed a desire to step down, but King Abdullah asked him to stay on for as long as he is around.

“So, the real question is, if there is a new oil minister soon, will it lead to a change in Saudi energy policy?”.

Crude oil futures initially jumped on Friday but then came off highs and were still trading at levels more than 50 per cent below their most recent peaks in June, 2014.

LAST SUCCESSION

A continuation of existing policies would be in line with what happened after the last succession. In 2005, when King Fahd died, similar concerns over Saudi Arabia’s leadership emerged.

Following the announcement of King Fahd’s death on August 1 2005, Brent rose to an all-time high of almost $61 a barrel.

Crown Prince Abdullah, who had effectively been in charge since Fahd suffered a stroke in 1995, was installed as new king and swiftly calming traders officials stressed that there would be no changes in an oil policy of keeping markets were well-supplied.

HUGE MARKET SHIFTS

Friday’s announcement of King Abdullah’s death comes amid some of the biggest shifts in oil markets in decades.

Oil prices have halved on the back of soaring supplies coupling with cooling demand due to economic slowdown in Europe and Asia, and because of improvements in energy efficiency, meaning producers are earning sharply lower revenues.

As a result, Saudi Arabia faces its first budget deficit since 2009 and it has to navigate difficulties with other OPEC members such as Oman and Venezuela, which disagree with the strategy of not defending prices.

Booming US shale production has turned the United States from the world’s biggest oil importer into a top three producer, with output topping 9 million barrel per day.

Led by Saudi Arabia, OPEC announced last November it was keeping output steady at 30 million barrels per day, pulling down the Brent price by another quarter over the next month as the market digested the fact OPEC would not come to the rescue.

OPEC’s decision not to act, led by Saudi Arabia, was aimed at defending market share against US shale producers as well as other non-OPEC exporters such as Brazil or Russia.

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Agencies
August 2,2020

Dubai, Aug 2: The United Arab Emirates (UAE) announced on Saturday that it has started operations in the first of four reactors at the Barakah nuclear power station - the first nuclear power plant in the Arab world.

Emirates Nuclear Energy Corporation (ENEC), which is building and operating the plant with Korea Electric Power Corporation (KEPCO) said in a press release that its subsidiary Nawah Energy Company "has successfully started up Unit 1 of the Barakah Nuclear Energy Plant, located in the Al Dhafrah Region of Abu Dhabi".

That signals that Unit 1, which had fuel rods loaded in March, has achieved "criticality" - a sustained fission chain reaction.

"The start-up of Unit 1 marks the first time that the reactor safely produces heat, which is used to create steam, turning a turbine to generate electricity," said ENEC.

Barakah, which was originally scheduled to open in 2017, has been dogged by delays and is billions of dollars over budget. It has also raised myriad concerns among nuclear energy veterans who are concerned about the potential risks Barakah could visit upon the Arabian Peninsula, from an environmental catastrophe to a nuclear arms race.

Paul Dorfman, an honorary senior research fellow at the Energy Institute, University College London and founder and chair of the Nuclear Consulting Group, has criticised the Barakah reactors' "cheap and cheerful" design that he says cuts corners on safety.

Dorfman authored a report (PDF) last year detailing key safety features Barakah's reactors lack, such as a "core catcher" to literally stop the core of a reactor from breaching the containment building in the event of a meltdown. The reactors are also missing so-called Generation III Defence-In-Depth reinforcements to the containment building to shield against a radiological release resulting from a missile or fighter jet attack.

Both of these engineering features are standard on new reactors built in Europe, says Dorfman.

There have been at least 13 aerial attacks on nuclear facilities in the Middle East - more than any other region on earth.

The vulnerability of critical infrastructure in the Arabian Peninsula was further laid bare last year after Saudi Arabia's oil facilities at Abqaiq and Khurais were attacked by 18 drones and seven cruise missiles - an assault that temporarily knocked out more than half of the kingdom's oil production.

On Saturday, Dorfman reiterated his concern that there is no regional protocol in place to determine liability should an accident or incident at Barakah result in radioactive contamination spreading from the UAE to its neighbours. 

"Given Barakah has started up, because of all the well-rehearsed nuclear safety and security problems, it may be critically important that the Gulf states collectively evolve a Nuclear Accident Liability Convention, so that if anything does go wrong, victim states may have some sort of redress," Dorfman told Al Jazeera. 

The UAE has substantial oil and gas reserves, but it has made huge investments in developing alternative energy sources, including nuclear and solar.

Experts though have questioned why the UAE - which is bathed in sunlight and wind - has pushed ahead with nuclear energy - a far more expensive and riskier option than renewable energy sources.

When the UAE first announced Barakah in 2009, nuclear power was cheaper than solar and wind. But by 2012 - when the Emirates started breaking ground to build the reactors - solar and wind costs had plummeted dramatically.

Between 2009 and 2019, utility-scale average solar photovoltaic costs fell 89 percent and wind fell 43 percent, while nuclear jumped 26 percent, according to an analysis by the financial advisory and asset manager Lazard.

There are also concerns about the potential for Barakah to foment nuclear proliferation in the Middle East - a region rife with geopolitical fault lines and well-documented history of nuclear secrecy.

The UAE has sought to distance itself from the region's bad behaviour by agreeing not to enrich its own uranium or reprocess spent fuel. It has also signed up to the United Nation's nuclear watchdog's Additional Protocol, significantly enhancing inspection capabilities, and secured a 123 Agreement with the United States that allows bilateral civilian nuclear cooperation.

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Agencies
July 26,2020

Jeddah, Jul 26: The city of Makkah is opening its arms again to welcome pilgrims for the annual Hajj — although only a handful compared with previous years.

Because of the COVID-19 pandemic, this year’s event is limited to about 1,000 pilgrims, all from inside Saudi Arabia, about 700 of whom are expatriates.

Abdullah Al-Kathiri, an Emirati and a recovered COVID-19 patient, postponed his pilgrimage last year because it coincided with his wedding plans. “I’ve heard from many who’ve performed the pilgrimage in past years that it was always a smooth process, even with the massive numbers,” he said. “So you could imagine how it would be with the limited number of pilgrims this year. Surely it will be a great experience.”

Khadija, a Bulgarian expatriate, was overcome with tears when she heard she would be performing Hajj this year. “I didn’t expect they’d accept,” she said. “I’m sure this year’s Hajj will be an exceptional one in all respects.”

Dr. Haifa Yousef Hamdoon, a Tunisian physician in Qassim, is another who did not expect to be accepted because of the low numbers this year. “When I received confirmation of my request, I was overjoyed and couldn’t believe it,” she said.

Mu’taz Mohamed, a Sudanese pilgrim who also lives in Qassim region, praised the preventive and precautionary health measures taken in order to ensure his safety and that of other pilgrims, to enable them to perform the rituals safely.

After completing their arrival procedures, the pilgrims were taken to their accommodation in Makkah, supervised by the Ministry of Hajj and Umrah. They will stay there for four days before beginning their pilgrimage on July 30.

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News Network
January 7,2020

Tehran, Jan 7: Iranian state television says 35 people have been killed and 50 others injured in a stampede that erupted at a funeral procession for a general slain in a US airstrike.

The TV says the stampede erupted in Kerman, the hometown of Gen. Qassem Soleimani where the procession was underway on Tuesday.

A procession in Tehran on Monday drew over 1 million people in the Iranian capital, crowding both main thoroughfares and side streets in Tehran.

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