Rauf Mammadov

Saudi Arabia surprised the global oil and gas industry earlier this month by reshuffling its top two energy positions. Long-serving technocrat Khalid al-Falih was ousted as chair of Saudi Aramco one day and as head of the Ministry of Energy the next.

OPEC+ nations have ended speculation about whether they would continue oil production cuts by agreeing to a nine-month extension. Led by the global petroleum powers Saudi Arabia and Russia, the group agreed on July 2 to extend the current level of cuts until the second quarter of 2020.

In this week’s Monday Briefing, MEI experts Alex Vatanka, Gonul Tol, Gerald Feierstein, Marvin G. Weinbaum, Rauf Mammadov, and Robert S. Ford provide analysis on recent and upcoming events including Iran’s announcement that it has exceeded its enriched uranium limit, Turkey’s purchase of Russia’s S-400s missile defense system over American objections, an Emirati announcement that it will downsize military involvement in Yemen, the resumption of intra-Afghan peace talks, Russia’s continuing embrace of OPEC+ oil production cuts, and the emergence of potential threats to Tunisia’s democracy.

In late May, Saudi Aramco signed an agreement to buy 5 million tons per annum of liquefied natural gas (LNG) from San Diego-based Sempra Energy’s planned LNG terminal in Port Arthur, Texas. The deal exemplifies Saudi Aramco’s determination to boost the share of LNG and petrochemicals in its portfolio before its long-awaited public offering in 2021.

In this week’s Monday Briefing, MEI experts Randa Slim, Gerald Feierstein, Zubair Iqbal, Marvin G. Weinbaum, Mirette F. Mabrouk, Robert S. Ford, and Rauf Mammadov provide analysis on recent and upcoming events including the escalating tensions between the United States and Iran with Iraq caught in between, Jared Kushner’s economic development plan for Palestinians, the IMF’s bailout deal with Pakistan, political turmoil ahead of the Afghan presidential election, developments in the Egyptian media landscape following recent constitutional amendments, debate over how to approach elections in Algeria, and the impact of US-Iran tensions on the oil market.

The Trump administration’s decision on April 22 to stop waiving sanctions on eight countries that purchase Iranian crude sent oil prices to their highest levels in six months and resulted in defiance and hand-wringing from the three biggest buyers. Meanwhile, Iran said it would retaliate by shutting the Strait of Hormuz, a move that would make it difficult for other Persian Gulf countries to get their crude to market.

Until two decades ago, Central Asia was a Russian playground. With increasing investment from the Gulf and China, however, the landscape has changed. The UAE, specifically, has recently been vying to play a larger role in this muslim-majority region through large investments in infrastructure.

Saudi Crown Prince Mohammed bin Salman has wrapped up another round of checkbook diplomacy, showering up to $100 billion on Pakistan, India, and China during his visit to the three countries in late February. The trip was important for another reason as well: It showcased a new Saudi strategy of playing a more assertive foreign-policy role far beyond the Middle East.

With more of their geopolitical goals aligning, ties between Riyadh and Moscow are growing closer, and the kingdom plans to invest billions of additional dollars in Russian petroleum and other projects.

While OPEC and Russia-led non-OPEC members agreed to cut oil production last week by 1.2 million bpd, Riyadh’s ability to control the cartel and global oil prices is waning.

In this week’s Monday Briefing, MEI experts discuss recent and upcoming events including MBS’ lukewarm reception at the G20 summit, plans for a UN-hosted Western Sahara roundtable, and Qatar’s decision to leave OPEC.

In this week’s Monday Briefing, MEI experts discuss recent and upcoming events including the Iraq-Kurdistan pipeline deal, how the YPG partnership affects US-Turkey ties, and the new Russia-Turkey gas pipeline.

Although the Trump administration has said it will issue temporary waivers to some major importers of Iranian oil, further declines in Iran’s exports are likely after sanctions come into effect on Nov. 4.

Although the current oil-market landscape might seem beneficial to the Gulf states, it will be difficult to sustain amid major drops in global oil supply, Washington’s standoff with Moscow and Tehran, and quota disagreements between Saudi Arabia and Russia.

Last week, major news outlets reported that China National Petroleum Corporation had acquired French oil and gas company Total’s share in the development of Iran’s South Pars gas field, citing an elusive article published by Iranian state news agency IRNA.