Saudi Aramco names first woman to head overseas office

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.

Occupied Jerusalem, Jul 19: Israeli Prime Minister Benjamin Netanyahu’s corruption trial resumed on Sunday.

Netanyahu is charged with fraud, breach of trust and accepting bribes in a series of scandals in which he is alleged to have received lavish gifts from billionaire friends and exchanged regulatory favors with media moguls for more agreeable coverage of himself and his family.

Netanyahu denies wrongdoing, painting the accusations as a media-orchestrated witchhunt pursued by a biased law enforcement system.

The trial opened in May. Just before appearing in front of the judges, Netanyahu took to a podium inside the courthouse and flanked by his party members bashed the country’s legal institutions in an angry tirade.

Netanyahu was not expected to appear at Sunday’s hearing, which is taking place at an occupied Jerusalem court and is mostly a procedural deliberation.

The trial resumes as Netanyahu faces widespread anger over his government’s handling of the coronavirus crisis.

While the country appeared to have tamped down a first wave of infections, what’s emerged as a hasty and erratic reopening sent infections soaring. Yet even amid the rise in new cases Netanyahu and his emergency government — formed with the goal of dealing with the crisis — appeared to neglect the numbers and moved forward with other policy priorities and its reopening plans.

It has since paused them and even re-impose restrictions, including a weekend only lockdown set to begin later this week.

Netanyahu’s government has been criticized for a baffling, halting response to the new wave, which has seen daily cases rise to nearly 2,000. It has been slammed for its handling of the economic fallout of the crisis.

His trial thus comes at inopportune timing. Netanyahu had hoped to ride on the goodwill he gained from overcoming the first wave of infections going into his corruption trial, but the increasingly souring mood has affected his approval rating and may deny him the public backing he had hoped for. The anger has sparked protests over the past few weeks that have culminated in violent clashes with police.