The state remains Aramco's biggest shareholder, owning 90.18% of the Company.
Riyadh-based Sanabil is an investment company that commits approximately US$3 billion a year to private transactions, its website says.
The transfer will solidify PIF’s strong financial position and credit rating, the crown prince's statement. The Fund is responsible for the bulk of projects aimed at transforming the Saudi economy to reduce its reliance on oil revenue.
Iran and Saudi Arabia agreed to end their diplomatic rift and reopen their missions last month in a deal brokered by China. How will the rapprochement between Tehran and Riyadh affect Jerusalem, and how should Israel respond to what appears to be a game-changer in the Middle East?
On the one hand, Saudi Arabia’s decision to move closer to Iran rather than Israel is of real concern. The Biden Administration has been pushing for normalization between Saudi Arabia and Israel for some time, and Prime Minister Benjamin Netanyahu stated clearly in his inaugural speech three months ago that his main foreign policy objective is to broaden the 2020 Abraham Accords and reach an agreement with Riyadh, while halting Iran’s nuclear program – which both Israel and Saudi Arabia strongly oppose.
According to Yadlin, Sunni Saudi Arabia and Shi’ite Iran will remain enemies on religious, ideological and strategic levels, and it is not at all clear that they will be able to bridge the hostility between them within two months, as their agreement stipulates.
It is doubtful whether Iran will be able to fulfill its commitment and force the Houthis, who are acting relatively independently, to completely cease attacks against Saudi Arabia from Yemeni territory.
As the Post’s Seth Frantzman pointed out, the reason why the Saudi-Iranian deal was initially portrayed as a setback for Israel is that just days before it was announced, there had been reports in The Wall Street Journal and The New York Times that Saudi Arabia had presented conditions for normalizing ties with Israel – including security guarantees from the US.
Frantzman argued that although the Saudi-Iranian deal might pave the way for relations between Riyadh and Syria, which would worry Israel, it could also lead to Iran scaling down its nuclear program, which would be a welcome development.
“Saudi Arabia will not want to sign a deal and then suddenly have Iran develop a bomb that threatens the region,” he wrote. “Clearly, regional stability means not having a nuclear-armed Iran or a nuclear arms race.”
Jerusalem and Riyadh have maintained clandestine contacts over establishing relations and Netanyahu said after meeting with US National Security Adviser Jake Sullivan in January that they had discussed “the next steps to deepen the Abraham Accords and widen the circle of peace, with an emphasis on a breakthrough with Saudi Arabia.”
No Israeli officials have gone on record about the resumption of relations between Saudi Arabia and Iran, or the fact that it was a diplomatic victory for China in a region in which the US has historically played the dominant role.
The hope in Jerusalem is that, as in the case of the United Arab Emirates, Saudi Arabia’s detente with Iran will not prevent it from forging relations with Israel in the near future. Perhaps it will even expedite the process.
Regardless, now is not the time for Israel to take a wait-and-see approach, but rather to engage with both the US and – through appropriate channels – Saudi Arabia and explore how the window of opportunity for normalization can be maintained and eventually seized.
The Indian ministry put the worth of Iran’s exports to India at US$134 million in January and February 2023, while the figure was US$70 million in the same time period of 2022, IRIB reported.
The value of trade between the two countries dropped 13% to US$358 million in the first two months of year 2023, from US$412 million in the first two months of the past year.
According to the data released previously by the Indian Ministry of Commerce and Industry, the value of Iranian export to India increased by 60% in 2022 as compared to the year 2021.
The Indian ministry put the worth of Iran’s exports to India at US$653 million in 2022, while the figure was US$409 million in 2021.
As reported, petroleum products have been the major goods imported by India from Iran during this period.
According to the data, the value of trade between Iran and India reached US$2.5 billion in 2022, rising 48 percent from US$1.693 billion in 2021.
During January-December 2022, India’s export to Iran also increased by 44% to US$1.847 billion, while the figure was US$1.284 billion in 2021.
Rice was India’s major export to Iran, during which the country shipped US$1.098 billion worth of rice to the Islamic Republic.
In late May 2022, the Iranian ambassador to India said that Iran and India are trying to diversify the channels of payments to expand bilateral trade.
In an exclusive interview with Financial Express Online, Ali Chegeni said, “We are trying to diversify the channels of payments and accordingly wish to extend and expand an already existing mechanism in order to cover all of the goods and services including all of the non-oil goods and to achieve this”.
During the past two years, because of Covid restrictions, we pursue the issue via virtual dialogues and currently, our officials are following the matter through the exchange of delegations, the envoy stated at the time.
“We want to develop our economic and trade relations beyond energy and petrochemical products. because, due to the complementarily of Iran and India's economies, an extensive range of non-oil trade exists between the two sides including trade on goods and services, investment, tourism, education, and … which may pave the way for multiplying our economic relations ten times more than current relations in mid and long terms”, Chegeni said.
In a statement issued early Sunday morning, the Maritime and Port Authority of Singapore (MPA) said the chemical and oil product tanker had been located off the coast of the city of Abidjan by a commercial ship, the Monjasa Sprinter. The ship had picked up a distress call from Success 9 and MPA was eventually alerted.
MPA, which has been working closely with HS Ocean – Success 9’s owner – as well as multinational agencies through the Information Fusion Centre and the Monrovia Regional Maritime Rescue Coordination Centre, subsequently informed the two centres.
A patrol vessel from the Ivory Coast’s navy was deployed to confirm and board the ship, and all crew members were found to be safe and in good health.
The ship has since arrived at Abidjan’s port.
During the search for Success 9, MPA had been collaborating with various agencies in the region, including the Maritime Domain Awareness for Trade – Gulf of Guinea, a joint maritime monitoring effort by France and Britain.
It also worked with regional security forces, the French navy, as well as the coast guards and maritime administrations from the Ivory Coast, Ghana, Guinea, Liberia, Sierra Leone and Nigeria.
“All nearby and passing commercial ships were also cued to help in the search for Success 9,” said MPA.
Since it was boarded by pirates on Monday, the Success 9 had been uncontactable, with its location failing to show up on automatic identification systems as well.
Described as a “black-hulled tanker with a white superstructure, (and a) white funnel with blue stripes”, the search for the vessel had seen Ivory Coast authorities deploying air and sea assets to the vicinity of its last known position.
MPA advised Singapore-registered ships to exercise caution when operating in Africa. It also emphasized the need to implement guidelines found in the Best Management Practices West Africa.
The publication, released by the International Chamber of Shipping and other shipping industry associations in March 2020, outlines ways to mitigate piracy-related threats at sea.
“Companies should also regularly review their ship security assessment and plan under the International Ship and Port Facility Security Code.
“Companies are advised to report all pirate activity, including both actual and attempted attacks, as well as suspicious sightings, to local authorities,” MPA added.
This was under a major prisoner swap deal in which 250 Houthi prisoners also left Abha International Airport for Sanaa, according to Brig. Gen. Turki Al-Maliki, spokesman of the Coalition Forces to Support Legitimacy in Yemen.
This was the second phase of the prisoner swap involving about 800 prisoners of war, initiated by the legitimate government and the Houthis in Yemen.
Brig. Gen Al-Maliki said the prisoner exchange process is of great concern for the political and military command of the Coalition to end the prisoner file and exchange all prisoners and detainees.
He also appreciated the efforts of the International
Committee of the Red Cross, as well as the Special Envoy of the United Nations
Secretary General to Yemen Hans Grundberg for supporting and making the swap of
prisoners and detainees a great success.
The prisoners who landed at Riyadh airport were received by the Chief of the
General Staff Gen. Fayyad Al-Ruwaili, Deputy Chief of the General Staff and
Commander of the Joint Forces Lt. Gen. Mutlaq Al-Azima, commanders of the armed
forces branches, Head of the Military Wing at the Ministry of National Guard
Maj. Gen. Muhammad Al-Qahtani, and Military Attaché at the Sudanese embassy in
the Kingdom Brig. Gen. Muhammad Abdul Wahed Absher.
The release of these prisoners was the second phase of the three-day prisoner swap between the legitimate Yemeni government and the Houthis that began on Friday.
A flight carrying 120 former detainees took off from the city of Abha on Saturday. The operation will continue on Saturday and Sunday to exchange about 800 prisoners from both sides, with operating 15 flights to six airports in Yemen.
Majid Fadael, spokesman of the government delegation to the prisoners’ negotiations, member of the negotiating delegation and undersecretary at the Ministry of Human Rights, said in a statement on his Twitter account that the second phase of the operation will take place through the airports of Mocha-Sanaa, Abha-Sanaa, and Sanaa-Riyadh, and it will be on board six flights operated by the International Committee of the Red Cross.
The first phase of the exchange of prisoners between the two sides began Friday when the International Committee of the Red Cross (ICRC) planes transported 318 prisoners to and from the Yemeni capital Sanaa and Aden.
Among the 69 prisoners, released by the Houthi group, included former Defense Minister Mahmoud Al-Subaihi and Nasser Mansour Hadi, the brother of Yemeni President Abedrabbo Mansour Hadi.
The Yemeni government released 249 prisoners who were transferred from Aden to Sanaa on board two flights.
Meanwhile the Yemeni Minister of Interior Ibrahim Ali Ahmed Haydan said that this operation, which took place at the initiative of Saudi Arabia and the Coalition to Support Legitimacy, is the largest ever prisoner swap in years.
He emphasized that the prisoner exchange will continue to include all prisoners after the upcoming Eid Al-Fitr. “There has been greater understanding regarding the peace process after the exchange of prisoners,” he pointed out.
It is noteworthy that in the last major exchange that took place in October 2020, more than 1,050 prisoners were released and they returned to their regions or countries, according to a report of the International Committee of the Red Cross.
The release operations are the result of talks concluded on 20 March, 2023, in Bern, Switzerland, where the parties to the conflict in Yemen finalized the plan for the release. The ICRC co-chaired these meetings with the Office of the Special Envoy of the Secretary-General for Yemen
In a statement, Moody's explained that the affirmation of the ‘A1’ rating reflects Israel's strong economic growth and improving fiscal strength which Moody's expects to continue in its baseline scenario. The economy has proven resilient to many economic and geopolitical shocks over the past decades and has grown at a rapid clip, helped by Israel's globally competitive high-tech industries.
Moody's concerns
Regarding the decision to downgrade the outlook, Moody's wrote that the change of outlook to stable from positive reflects a deterioration of Israel's governance, as illustrated by the recent events around the government's proposal for overhauling the country's judiciary... The manner in which the government has attempted to implement a wide-ranging reform without seeking broad consensus points to a weakening of institutional strength and policy predictability. As a result, the risks on Israel's rating are now balanced, leading to a stable outlook.
"All in all, the recent events offset the positive developments that had led Moody's to assign a positive outlook in April 2022, which related to strong economic and fiscal performance and the implementation of structural reforms by the previous government," the statement continued.
The agency had upgraded Israel's outlook to 'positive' in April 2022, explaining then that the key drivers for the change in outlook included the government's reform agenda that aimed to address longer-term challenges and the agency's expectation of a further reduction in the government's debt ratio.
Netanyahu and Herzog spoke with Moody's
Prime Minister Benjamin Netanyahu and President Isaac Herzog spoke to officials at Moody’s on Friday before the publication of the rating, in order to sway them not to downgrade the rating.
Israel's current rating ‘A1’ is an upper-medium score. This indicates that Israel is capable of repaying short-term loans.
Moody had previously warned the government of economic impacts on its proposed legislative policies and many economists echoed these concerns.
In March, Moody said the reform, if implemented in full, could materially weaken the strength of the judiciary and be credit negative. The planned changes could also pose longer-term risks for Israel’s economic prospects, particularly capital inflows into the important high-tech sector.
Fitch, another credit assessor, previously chose to maintain Israel’s A+ credit rating in March, but with a caveat of its own, “Fitch believes the reform could hurt Israel’s credit profile by weakening governance indicators or if the weakening of institutional checks leads to worse policy outcomes or sustained negative investor sentiment.”
No single oil producing country is acting as the Pied Piper here. The great beauty about it is that Saudi Arabia and seven other major OPEC countries have unexpectedly decided to support Russia’s efforts and unilaterally reduce production.
While the eight OPEC countries are talking about a reduction of one million barrels per day (bpd) from May to the end of 2023, Russia will extend for the same period its voluntary adjustment that already started in March, by 500,000 barrels.
Now, add to this the production adjustments already decided by the OPEC Plus previously, and the total additional voluntary production adjustments touch a whopping 1.6 million bpd.
Fundamentally, many analysts had forewarned, the Western sanctions against Russian oil creating distortions and anomalies in the oil market and upsetting the delicate ecosystem of supply and demand, which were compounded by the incredibly risky decision by the G7, at the behest of the US Treasury, to impose a price cap on Russia’s oil sales abroad.
On top of it, the Biden administration’s provocative moves to release oil regularly from the US Strategic Petroleum Reserve in attempts to micromanage the oil prices and keep them abnormally low in the interests of the American consumer as well as to keep the inflationary pressures under check turned out to be an affront to the oil-producing countries whose economies critically depend on income from oil exports.
The OPEC Plus calls the production cuts a precautionary measure aimed at supporting the stability of the oil market. In the downstream of the OPEC Plus decision, analysts expect the oil prices to rise in the short term and pressure on Western central banks to increase due to the possible spike in inflation.
What stands out in the OPEC Plus decision is that Russia’s decision to reduce oil production by the end of the year has been unanimously supported by the main Arab producers.
Independent but time-coordinated statements were made by Saudi Arabia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan, while Russia confirmed its intention to extend until the end of the year its own production reduction by 500,000 barrels per day, which began in March.
Significantly, these statements have been made precisely by those largest oil producers in OPEC, who have a record of fully utilizing their existing quota. Put differently, the reduction in production is going to be real, not just on paper.
Partly at least, the banking crisis in the US and Europe prompted the OPEC Plus to intervene. Although Washington will downplay it, in March, Brent oil prices fell to US$70 per barrel for the first time since 2021 amid the bankruptcy of several banks in the US and the near-death experience of Credit Suisse, one of the largest banks in Switzerland. The events sparked concern about the stability of the Western banking system and fear of a recession that would affect oil demand.
There is every likelihood that tensions may increase between the US and Saudi Arabia as higher oil prices will push inflation and make it even more difficult for the US Federal Reserve to find a balance between raising the key rate and maintaining financial and economic stability.
Equally, the Biden administration must be furious that practical cooperation is still continuing between Russia and the OPEC countries, especially Saudi Arabia, notwithstanding the West’s price cap on Russian oil and Moscow’s decision to unilaterally cut production in March.
However, the Biden administration has only a limited range of options to respond to the OPEC Plus surprise move, one, go for another release of oil from the Strategic Petroleum Reserve; two, pressure US producers to increase domestic oil output; three, back legislation that would allow the United States to take the dramatic step of suing OPEC nations; and, four, curb the US export of gasoline and diesel.
To be sure, the OPEC Plus production cut goes against the Western demand to increase oil output even as sanctions were imposed against Russian oil and gas exports. On the other hand, the disruption in oil supplies from Russia contributed to the rising inflation in the EU countries.
The US wanted the Gulf Arab states to step in and step-up oil production. But the latter did not oblige because they felt that there wasn’t enough economic activity in the West and there were clear signs of recession contrary to expectation.
Thus, as a result of the sanctions against Russia, Europe is facing the complex situation of inflation and near-recession known as stagflation. In reality, the adaptive and agile OPEC Plus read the situation correctly and has shown that it is willing to act ahead of the curve.
At a time when the world economy is struggling to grow at a healthy rate, the demand for oil would be relatively less, and it makes sense to cut oil production to maintain the price balance.
All that the Western leaders can complain about is that the OPEC Plus cut in oil output has come at an inappropriate time. But the woes of Western economies cannot be laid at the door of OPEC Plus as there are inherent problems which are now coming to the surface.
For instance, the large-scale protests in France against pension reform or the widespread strikes in Britain for higher wages show that there are deep structural problems in these economies, and the governments seem helpless in tackling them.
In geopolitical terms, the OPEC Plus move came after a meeting between Russian Deputy Prime Minister Alexander Novak and Saudi Energy Minister Prince Abdulaziz bin Salman in Riyadh on March 16 that focused on oil market cooperation. Therefore, it is widely seen as the tightening of the bond between Russia and Saudi Arabia.
In fact, in May, as the largest members of OPEC join Russia in its unilateral reduction, the balance of quotas and the ratio of market shares between and amongst the participants in the OPEC Plus deal will return to the level set when it was concluded in April 2020.
The
rise in crude oil prices particularly benefits Russia. Simply put, the
production cuts will tighten up the oil market and thus help Russia to secure
better prices for the crude oil it sells. Second, the new cuts also confirm
that Russia is still an integral and important part of the group of oil
producing countries, despite the Western attempts to isolate it. Third, the consequences
of the decision are
all the greater because, unlike the previous cuts by the OPEC+ group at the
height of the pandemic or last October, today, the momentum for global oil
demand is up, not down—what with a strong recovery by China expected.
That is to say, the surprise OPEC Plus reduction further consolidates the Saudi-Russian energy alliance, by aligning their production levels, thus placing them on equal footing. It is a slap in the face for Washington.
Make no mistake, this is another signal regarding a new era where the Saudis are not afraid of the US anymore, as the OPEC leverage is on Riyadh’s side.
The Saudis are only doing what they need to do, and the White House has no say in the matter. Clearly, a recasting of the regional and global dynamics that has been set in motion lately is gathering momentum. The future of the petrodollar seems increasingly uncertain.
