The new cuts will likely not do much to shore up oil prices.
Saudi Arabia’s recent decision to call for an urgent OPEC+ meeting was driven by a simple logic. In spite of its obvious advantages over other oil producers, the kingdom is still taking serious risks as it pursues an oil price war.
This Thursday, a postponed virtual meeting of “OPEC+ and Friends” will determine the level and seriousness of participation in a global oil pact.
Saudi Arabia declared a price war against Russia in early March to prove a point: that it can offer an unprecedented supply of 12.3 million barrels per day (bpd), way above the record 11 million bpd it reached in November 2018, and expand its market share at the expense of Moscow. As the coronavirus pandemic brings the world to a standstill, the question is how long it can sustain this war.
In the face of Algeria’s Hirak protest movement, the response of the EU so far has been measured, and it is notable that the EU’s calls for democratic reform are framed in economic terms that emphasize the benefits of greater economic integration between the states of the Maghreb. What opportunities do the ongoing changes in Algeria present for enhancing economic integration in the long term?
The outbreak of a Russian-Saudi oil price war earlier this month might offer some comfort to Iran, a country which has in recent years become unnerved by the increasingly close ties between Moscow and Riyadh. However, it is premature to see an Iranian geopolitical win emerging from the Russian-Saudi spat, and history should give Tehran plenty of reservations about Moscow’s ability to deliver on its economic promises to Iran. While Iran and Russia will likely continue to pay lip-service to the idea of an economic partnership, each side will remain preoccupied with larger concerns. This is a tale of unfulfilled economic potential.
Economies around the world are being battered by two “black swan” events at the same time: the COVID-19 virus and the oil price war between Russia and Saudi Arabia. Naturally, the countries of the Middle East and North Africa (MENA) are also affected, although each in different ways. Those that are net users of energy, which could have benefitted substantially from the vastly lower energy prices, are getting hit hard by COVID-19, while oil and gas producers are suffering from an all-out oil price war made worse by the steep decline in worldwide demand caused by the pandemic.
The story from Iraq since last October has been mainly one of uplifting hope, as mass protests sweep across the country in a fight against corruption, nepotism, and bad governance. But what of the places left behind and ignored? For most of its modern history, Iraq has been embroiled in sectarianism and conflict, most recently with the rise of ISIS. The country has celebrated its ability to fight ISIS and take back the areas the group controlled between 2013 and 2017, but for those that remain in the most vulnerable liberated areas, life is precarious and dangerous, with underserviced communities living in the most dire of conditions.
Washington’s foreign relations in the Middle East are often characterized by ebb and flow, tracking the region’s dynamic politics. But when it comes to Iraq, this ebb and flow is especially turbulent, and the country’s energy sector has been thrown under the spotlight as Washington presses Baghdad to take swift action to ensure its “energy independence” from Iran.
On March 1, Iraqi PM designate Mohammed Tawfiq Allawi announced that he had failed to form a new government to replace the current caretaker one headed by PM Adel Abdul-Mahdi. In the post-Saddam era, government formation in Iraq has always been a complicated process, but this is the first time since 2003 that a PM designate failed to form a government and the episode has revealed fundamental deficiencies in the Iraqi political process.
If OPEC’s history is anything to go by, everyone suffers from an oil price war.
The country’s political parties now move to a new stage of repeating the crisis of the last few months, to nominate a new PM-designate.
The latest economic crisis in Syria is hitting the population hard. Syrians have been beset by currency depreciation, soaring prices for basic goods, and energy shortages that have left people to freeze in the harsh winter, leading to growing and increasingly vocal discontent.
The main takeaway from the Saudi Aramco IPO in December 2019 is that the Saudi leadership is willing to fully support private investors.
The eastern Mediterranean has become an increasingly important focus for Turkey’s foreign and security policy, but the interlocking of new issues like energy politics and sovereignty rights with old problems like Cyprus has created significant challenges for Ankara.