Russia-Saudi oil cooperation to bring stability to markets: RDIF’s Dmitriev

Russian Minister of Energy Alexander Novak, Khalid Al-Falih Minister of Energy, Industry and Mineral Resources of Saudi Arabia and Minister of Energy of the United Arab Emirates, UAE, Suhail Mohamed Al Mazrouei, fromm left, attend a news conference after a meeting of the Organization of the Petroleum Exporting Countries, OPEC, and non OPEC members at their headquarters in Vienna, Austria, Saturday, June 23, 2018. (Ronald Zak/AP)
Updated 25 June 2018
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Russia-Saudi oil cooperation to bring stability to markets: RDIF’s Dmitriev

  • Saudi Arabia and Russia said they had a general consensus that the OPEC+ format should be “institutionalized” and extended until 2019 and beyond to monitor the market and change output if needed
  • Long-term Russia-Saudi cooperation “will ensure pricing stability on global markets and increase investments in the energy sector”

VIENNA: The joint deal by OPEC and other oil-producing allies to raise output demonstrates the strength of the Russia-Saudi energy alliance, which will help stabilize the market for many years to come, the head of Russia’s sovereign wealth fund said on Monday.
The Organization of the Petroleum Exporting Countries and other top crude producers agreed to raise output from July by about 1 million barrels per day (bpd), after Saudi Arabia persuaded arch-rival Iran to cooperate.
Ahead of OPEC’s Vienna meeting, Saudi Arabia and Russia, the world’s top oil producers, said they had a general consensus that the OPEC+ format should be “institutionalized” and extended until 2019 and beyond to monitor the market and change output if needed.
“A long-term partnership between Russia and Saudi Arabia related to the coordination of efforts between oil producers and the future creation of a new organization based on OPEC+ will help to overcome disagreements between the producers and work out a united action strategy on the global markets,” Kirill Dmitriev, the head of the Russian Direct Investment Fund (RDIF) told Reuters.
Dmitriev, one of the architects of the initial deal between Moscow and OPEC in December 2016, said that long-term Russia-Saudi cooperation “will ensure pricing stability on global markets and increase investments in the energy sector.”
At a meeting with the Russian President Vladimir Putin last week, Dmitriev said that Saudi Arabia, whose Crown Prince Mohammed bin Salman visited Moscow in June, agreed to invest $10 billion in Russia, of which $2 billion had already been spent.
Dmitriev told Reuters he expected investments between the two countries to double in the next three years.


Egypt stock market plunges as retail investors take flight

Updated 19 September 2018
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Egypt stock market plunges as retail investors take flight

  • Biggest index drop in Egypt since mid-2016
  • Saudi Arabia outperforms in Gulf

LONDON: Egyptian stocks tumbled to their lowest level this year on Wednesday as retail investors took flight.
A sharp rise in Suez Canal revenues, a major foreign exchange earner for the country, was not enough to quell investors concerns about the strength of the currency.
The main Egyptian stock index lost 3.8 percent which some fund managers blamed on generally negative sentiment toward emerging markets worldwide as well as more local speculation about possible currency devaluation.
“Our channel checks suggest the sell-off in the Egyptian market is local retail and institutions driven, on currency fears and speculation over a further round of devaluation,” said Vrajesh Bhandari, portfolio manager at Al Mal in Dubai, Reuters reported.
“Selling is further intensified as margin calls are triggered and technical support levels break down. The country canceled three consecutive Treasury auctions, citing investors’ unrealistic yield demands.”
Egypt’s Suez Canal revenues rose to $502.2 million in August up 6.7 percent from a year earlier according to official data released on Wednesday.
Elsewhere regional stock markets closed mostly lower with the exceptions of Abu Dhabi which edged 0.2 percent higher and Saudi Arabia, the best regional performer, which rose by 1.1 percent.
Saudi stocks are benefiting from the strong oil price which eased slightly yesterday but still hovered just under $79.
OPEC and some other oil producers including Russia will meet in Algeria on Sept. 23 to discuss how to allocate supply increases within their quota framework to offset the loss of oil exports from Iran following the introduction of sanctions by the US.
Those measures will come into force on Nov. 4 and data suggests that buyers are already retreating from Iranian crude purchases.
A key question for the oil price as well as regional stock markets in the weeks ahead will be the extent to which other Gulf oil exporters can compenaste for the loss of Iranian supplies by pumping more.