The collapse of the Doha Round on the initiative of Prince Mohammed It can say that Saudi Arabia has refused to rule not to mix business with politics. This can make the price of oil is still more unpredictable
The intervention in the negotiations on the freezing of oil in Doha son of the King of Saudi Arabia Mohammed bin Salman, reported by The Financial Times (FT), can say that the Hermitage Riyadh rejects the principle of long-term not to mix politics and the economy. Analysts believe that the reason for the decision to block negotiations Saudis had a conflict with Iran, which entered an acute phase earlier this year. Now participants in the oil market will have to follow the non-transparent policy of the Saudi royal family, rather than the balance of supply and demand, according to surveyed by Bloomberg experts.
Policy against oil
«In Doha it was tied to the politics” – quoted Bloomberg words of an oil analyst Yasser Elguindi of Medley Global Advisors, which advises large hedge funds. “The fact that Saudi Arabia seems to have blocked the deal – a measure of how its oil policy is determined by the currently conflict with Iran”, – has agreed to talk with the agency Jason Bordoff, director of the Center for Columbia University Global Energy Policy in New York City <. / p>
According to the FT, for the failure of Saudi Arabia’s oil-producing countries in the negotiations on the Doha price freeze was Prince Mohammed bin Salman. According to FT data, during talks April 17 Prince tried to call to withdraw the Saudi delegation to the Doha negotiations, demanding that she return home. Although representatives of Riyadh is still left, talks were disrupted, the newspaper said.
Even a few weeks before the failed negotiations Mohammed bin Salman said several times in an interview with Bloomberg, that of the production freeze agreement is possible only if a it will join Iran. But representatives of Iran in the negotiations did not come from the very beginning expressed about them skeptical of the Islamic Republic, on the contrary, increases production, seeking to regain share in the world market after the lifting of sanctions
Analysts Bloomberg could not be answered unequivocally. the question why the Air – Riyadh a few weeks negotiated the draft agreement in Doha, although it was clear that Iran will not join him. According to one version, which leads Bloomberg, Saudis hoped to use the meeting to deliver Russia, an ally of Iran in the international arena, with a choice: either support for Iran, or increases in oil prices
Sunni Saudi Arabia and Shiite Iran – old rivals in the Middle East policy. The civil war in Syria, Iran supports, including the supply of weapons, President Bashar Assad’s regime, and Saudi Arabia – the moderate armed opposition. In the Yemeni conflict by Saudi forces supported by other monarchies of the Persian Gulf war with Shiite rebels Huthis, in support of which they accuse Iran.
The relationship between the two countries deteriorated sharply at the beginning of the year, after the Saudi authorities in January executed Shiite Sheikh al-Nimrah Nimrah, accused of incitement. In response, activists defeated the Saudi Embassy in Tehran, Iran, and even government disown attackers, Riyadh and its allies broke with the Islamic Republic of diplomatic relations. Tehran said the introduction of an embargo on the supply of goods from Saudi Arabia
Prince instead technocrat
«On oil markets understand. In regard to Saudi Arabia now it is necessary to listen to Mohammed bin Salman “, – he told Bloomberg Michael Wittner, oil analyst at Société Générale in New York and a former CIA officer. The last word in the negotiations was clearly the prince, not the oil minister Ali al-Naimi, he added.
81-year-old technocrat al-Naimi, occupying a ministerial post for 21 years, has always been the embodiment of pragmatic policy of Saudi Arabia, the world oil market. In oil ministers accountable only to the king, has always been a great freedom of action, and in spite of political differences, al-Naimi was possible to negotiate with Iran on concerted action in the market, Bloomberg writes. Such strategies Saudi Arabia adhered to after the failure of the oil embargo on Western countries in 1973, which caused a sharp drop in demand
Analysts at Société Générale are sure. Now market participants need to “very closely monitor” the actions of bin Salman, who It became, in fact, determine the policy of the kingdom’s oil minister instead of oil. This is a “significant change” for the oil industry, have concluded they are.
Prince Mohammed, who was only 31 in August, has consistently strengthened its influence in the kingdom after in January 2015, ascended to the throne of his father, King Salman bin Abdul-Aziz. Under him the prince led the Ministry of Defence and initiated a military campaign in Yemen, and became chairman of the Council for Economic Affairs and Development and the Council, which controls the entire economy of Saudi Arabia, including the work of the world’s largest companies – oil exporter Saudi Aramco. Oil Ministry since last year and is accountable to Prince Mohammed.
Uncertain forecast
The ability to limit production of the largest importers, which is discussed since the beginning of this year, was the main growth driver the price of oil. In January, she reached the bottom, but after Russia, Saudi Arabia, Venezuela and Qatar announced the launch of negotiations on a production freeze, the price of a barrel of Brent increased by 35%.
Now tensions between Saudi Arabia and Iran can not afford to exporters to agree on limitation of production and re-negotiations on 2 June, according to a survey BMI Research on April 18. “Some OPEC members do not want and can not take on the role of stabilizing the manufacturer and maintain the price of oil, cut production,” – the document says. Large manufacturers likely will continue to defend market share than reduce or freeze production to support prices, according to consultancy.
However, Barclays predicts Brent price in the second quarter at $ 36 per barrel and the resumption of price increases in the fourth quarter to an average of $ 43 a barrel amid expectations of reducing oversupply. Reduced investment in production due to low prices creates prerequisites for reducing supply on the market, said Russian Energy Minister Alexander Novak in an interview with “Russia 24″ on April 18.
No comments:
Post a Comment