‘Premature’ to confirm OPEC+ cuts: Saudi minister

A reduction in output depends on all of OPEC and its partners making a cut, Saudi Energy Minister Khalid Al-Falih says. (Shutterstock)
Updated 05 December 2018

‘Premature’ to confirm OPEC+ cuts: Saudi minister

  • The oil producers are scheduled to meet in Vienna on Dec. 6 to discuss production policy for the next year
  • Donald Trump has been pushing Saudi Arabia to pump more oil to keep fuel prices low for Americans

LONDON: Saudi Energy Minister Khalid Al-Falih has dismissed suggestions that OPEC and its partner producers such as Russia will cut output at the next meeting as “premature.”
The oil producers are scheduled to meet in Vienna on Dec. 6 to discuss production policy for the next year.
Speaking in an interview with Bloomberg TV on Tuesday, the minister said that talks between producers were needed to “hear about their views about supply, demand and projections of their own country’s production,” before deciding on the best course of action for the market.
“We just need to figure out what needs to be done and by how much,” he said while attending UN climate talks in Poland.
His comments follow earlier remarks made in Abu Dhabi last month when he said that Opec+ should think about cutting production by 1 million barrels a day.
On Tuesday, he clarified these comments, telling Bloomberg that while projections said that there would be an oversupply of 1 million barrels, the market would have to wait until the Vienna meeting to be certain about that figure.
Any reduction in output relied on all of OPEC and its partners contributing to a cut, Al-Falih said. Russia was “in principle” in favor of a reduction in output, he said.
There has been some global resistance to cuts in OPEC oil production, with US President Donald Trump pushing Saudi Arabia to pump more oil to keep fuel prices low for Americans.
Al-Falih told Bloomberg that the riots in France over hikes in the cost of diesel was a result of “governments unreasonably taxing energy,” rather than the underlying price of crude oil.
“We want a thriving global economy and that requires affordable energy,” he said.
“Saudi Arabia released a lot of oil in the last six months … and the reason we did that is to make sure that energy supplies are plentiful and affordable. Yet consumer countries go and impose tax after tax after tax and take up the slack we are releasing and that is not fair,” he said.
Saudi Arabia currently produces between 11 million and 11.2 million barrels of oil a day, the Saudi minister said.
The price of oil has tumbled from four-year highs of more than $86 a barrel in early October to trade at about $63 per barrel on Tuesday.
On Monday, Qatar — which is currently being boycotted by Saudi Arabia and other Arab states for alleged links to terrorism — said it would leave OPEC next year to focus on gas production instead. The Qataris have said they will attend the December OPEC meeting.

China flags up UAE as Silk Road mega-hub with $300m port deal

Updated 11 min 20 sec ago

China flags up UAE as Silk Road mega-hub with $300m port deal

  • Cosco has invested an initial $300 million in CSP Abu Dhabi Terminal
  • The expansion plan foresees a capacity of 9.1 million TEU by 2023

ABU DHABI: China, the world largest trading nation, has thrown its weight behind Abu Dhabi as the Middle East hub for its Belt and Road Initiative (BRI) in an alliance with the UAE capital’s Khalifa Port.

Cosco, the Shanghai-based, state-owned group that ranks among the biggest shipping companies in the world, has invested an initial $300 million in the CSP Abu Dhabi Terminal, the first step in an investment program that could help make it one of the biggest ports in the Arabian Gulf over the next five years. Additional investment is pledged.

The expansion plan foresees a capacity of 9.1 million TEU (20-foot equivalent units, the standard measurement in the global container industry) by 2023. Jebel Ali, just 50 km away in Dubai, is currently by far the biggest port in the region with capacity of 22.1 million TEU.

China’s BRI is a state-sponsored strategy to enhance land and sea trading infrastructure in Asia, the Middle East and Africa via multibillion-dollar investments in trading hubs across the eastern hemisphere.

The Cosco-Abu Dhabi deal was unveiled at a ceremony at the port attended by prominent UAE and Chinese leaders.

Sheikh Hamed bin Zayed Al-Nahyan, chief of the Abu Dhabi Crown Prince Court, said: “China and the UAE share a strong and long-standing bond across a variety of ties, including economic, cultural, and trade and investment, and a common vision of a stable and prosperous future for our peoples and the world.”

He Jianzhong, China’s deputy minister of transport, said: “(The) terminal is the latest major achievement from China and the UAE’s joint efforts to implement ‘the 21st-century Maritime Silk Road’ in the ports and shipping industry.”

The deepwater, semi-automated container terminal includes the largest container freight station in the Middle East, covering 275,000 square meters.

“The state-of-the-art facility offers facilities for full and partial bonded container shipments, the full range of container packing services, short-term warehousing for deconsolidated cargo, as well as easy connectivity with container terminals in Khalifa Port,” a joint statement said.

The terminal has a design capacity of 2.5 million TEU and will begin with a handling capacity of 1.5 million TEU, with 1,200 meters of quayside. The water depth of the terminal is 16.5 meters, allowing it to accommodate mega-vessels typically carrying in excess of 20,000 TEU.

Ning Jizhe, deputy director of China’s National Development and Reform Commission, a state planning organization, said: “This inauguration ceremony is not only a milestone in the cooperation of China’s ‘Belt and Road Initiative,’ but also a good start for China and the UAE’s pragmatic cooperation in other key areas.”

Trade ties have been growing between China and the UAE since a visit by Abu Dhabi Crown Prince Mohammed Bin Zayed Al-Nahyan to Beijing three years ago. Chinese President Xi Jinping visited the UAE last summer.

The deal with Cosco is aimed at attracting foreign investment into the UAE via the Khalifa Industrial Zone of Abu Dhabi (KIZAD), the huge logistics and manufacturing zone that borders the port.

China’s BRI is one of the most ambitious infrastructure projects in history, but has been criticized by some observers for leaving the partners of Chinese companies in debt.