OPEC seeks oil alliance with Russia for next 10-20 years - Saudi crown prince

Saudi Crown Prince Mohammed bin Salman giving a speech during the Saudi-US Partnership Gala event in Washington, DC. (Photo: AFP via Saudi Royal Palace by Bandar Al-Jaloud)
Updated 28 March 2018

OPEC seeks oil alliance with Russia for next 10-20 years - Saudi crown prince

NEW YORK: Saudi Arabia and Russia are working on a historic long-term pact that could extend controls over world crude supplies by major exporters for many years.
Saudi Crown Prince Mohammed bin Salman said that Riyadh and Moscow were considering a deal to greatly extend a short-term alliance on oil curbs that began in January 2017 after a crash in crude prices.
“We are working to shift from a year-to-year agreement to a 10 to 20 year agreement,” the crown prince told Reuters in an interview in New York late on Monday.
“We have agreement on the big picture, but not yet on the detail.”
Russia, not a member of the Organization of the Petroleum Exporting Countries, has worked alongside the 14-member group during previous oil gluts, but a 10 to 20 year deal between the two would be unprecedented.
Top OPEC producer Saudi Arabia recruited Russia and other non-OPEC countries to help drain oversupply when oil prices collapsed to below $30 a barrel in 2016 from over $100 in 2014.
Crude has since recovered to $70 but fast-rising output from US shale producers has capped prices.
“This is all about whether the arrangement is a short-term expedient to deal with this particular crisis in the oil market, or whether it reflects a realignment in world oil,” said oil historian Daniel Yergin, vice chairman at consultancy IHS Markit.
“OPEC countries want to find a way to institutionalize this relationship rather than to have it be a one-shot deal.”
Robert McNally at consultancy Rapidan Energy Group said Riyadh wanted help in breaking the boom-bust cycles that characterize oil markets by capping crude on the upside as well as by helping lift low oil prices.
“History shows that without a long-term, powerful, competent coherent, disciplined swing producer in the oil markets ... you get space-mountain oil prices. Wild volatility of the sort we have seen in the past 10 to 15 years and that Saudi Arabia and Russia do not want to see again,” McNally said.
He said that would require Russia to join Saudi in building spare production capacity to use when prices rise too much.
SAUDI, RUSSIA ALLIANCE “THICKER THAN OIL“
A long-term pact between Moscow and Riyadh would effectively co-opt Russia to the Saudi-led OPEC cartel while strengthening Russia’s hand in the Middle East where the United States has long been the dominant super-power.
News of the potential oil alliance came at a time when the two have been working to cement an economic relationship despite being at odds over the conflict in Syria, where they back opposing sides.
A meeting between the Saudi crown prince and Russian president Vladimir Putin on the sidelines of a G20 meeting in China in September 2016 was instrumental in bringing Russia on board to support OPEC, non-OPEC oil curbs.
Last October, Saudi King Salman became the first Saudi monarch to visit Russia, providing investment and political support for a Russian economy battered by Western sanctions.
“It is a very important strategic development,” Helima Croft at RBC Capital Markets said of a potential 10 to 20 year Saudi-Russia oil collaboration.
“First, the Crown Prince is making the statement, not the oil minister, one more clear sign that he (like Putin) is the final word on his country’s oil policy.
“Second it is one more sign of the major reversal in Saudi-Russia relations. Saudi was a staunch cold war ally of the US Now this Russia-Saudi alliance appears to be thicker than oil and seems to be driven by the personal affinity between Putin and MBS,” said Croft.
ARAMCO IPO LATE 2018, EARLY 2019
The crown prince predicted that world oil demand would not peak until 2040, despite advances in renewable energy technologies and the electric vehicle.
In an attempt to end Saudi Arabia’s reliance on oil, he is leading a push to diversify the Saudi economy away from oil and gas by 2030.
Riyadh plans to raise funds through the flotation of a 5 percent stake in state Saudi oil company Aramco. Time is running out for an initial public offering this year but the crown prince said the IPO could still take place at the end of 2018 or in early 2019, depending on financial market conditions.
Saudi Oil Minister Khalid Al-Falih said last week that documentation was ready but that a venue for the IPO had not yet been decided. The New York stock exchange is still in the running for the IPO, alongside London and Hong Kong, but Falih said there was a risk of a “frivolous” legal action if Aramco were listed in the United States.


Saudis unite in condemnation of US Navy base attack

Updated 08 December 2019

Saudis unite in condemnation of US Navy base attack

  • The attack, in which a Saudi gunman killed three Americans, is viewed as an act that does not represent Saudi people
  • The OIC has said the attacker did not represent the tolerant Islamic values that distinguish the Saudi people

From the king and top-level Saudi government officials to everyday Saudi citizens, all are united in condemning the attack on a US Navy base in Pensacola, Florida, calling it as “un-Islamic” and barbaric.

The shooting of three Americans by a Saudi gunman was an individual attack that does not represent the Kingdom’s people, it has been widely  stressed. 

For decades, many Saudis have lived in the US for work or attended universities across many states, becoming their own ambassadors. 

Nedda Akhonbay, a communications professional working in Jeddah, expressed her sadness when she heard the news.

“My condolences go out to the families of the victims as I hope they find peace in their lives after facing such a tragedy. As a Saudi-American and having spent many formative years in the US and made friends who became like family, I thought this attack was very close to home and I hope both people work together to get past it.”

“As a student who lived in the States, I never faced any problems for being a Muslim,” said Alaa Sendi, an American-Saudi lecturer working in Jeddah University.

Having obtained a PhD in electrical engineering, Dr. Nazih Al-Othmani lived between the states of Michigan and Pennsylvania for ten years in the late 1990s and was in the US during the 9/11 attacks. He recalled how Americans understood that such atrocious attacks never represented a community, and this one was no exception.

“The tragic event that took place yesterday does not represent us, this attack is unacceptable regardless of any reason and no sane person can ever accept it,” he said. “I lived in the States for many years, I was also there on 9/11, and made many American friends throughout my time there. They stood by us, they helped us, protected us and our relationship was very civil and courteous. We need to stand together to combat this dangerous tendency that can be found in every community.”

The attack at the US naval station in Pensacola, Florida, was the second incident at an American military base in this week, following another shooting at Pearl Harbor in Hawaii on Wednesday. (
Josh Brasted / GETTY IMAGES NORTH AMERICA / AFP)

Many Saudis are angered over the actions of this one individual. Dr. Al-Othmani expressed his concerns about those who would take advantage of the situation and try to point a finger at Saudis.

“Though right-wingers will take advantage of the event and attack Saudi Arabia, I don’t believe many Americans will see it that way. Americans are aware enough to differentiate between the nationality of an individual and his actions,” he said.

Al-Othmani recommends that Saudi students communicate, cooperate and extend a hand of friendship to their respective communities.

In the decades of friendship and cooperation between the US and Saudi Arabia, many Americans have come to work in the Kingdom and some have made it their home. 

Dr. Alia Mitchell, vice dean of the Faculty of Humanities and Director of the Teaching and Learning Center at the Prince Sultan University in Riyadh, is an American citizen who has been a Muslim for more than 30 years and has lived in the Kingdom for more than 20 years. She has chosen to live in the Kingdom as she sees the beauty of the religion interwoven into society, one that she believes is not represented by the shooter. 

“When something tragic that happens like this, it’s on the individual,” she said. “it doesn’t go back to the community or the society.

“I’m still sickened and mostly very, very saddened with this tragedy,” said Melanie H. “I’ve a son the same age as the shooter and can’t imagine what the pain and grief his actions would do to me as a parent. To learn that your son has caused so much hell… that he has taken others’ lives.”

She said: “I lived in Saudi Arabia for over 10 years and I have experienced Saudi’s hospitality, warmth — nothing like what I imagined or expected before arriving. It isn’t perfect but then what country or nation is?” 

“Now that the country has opened its doors to the world, people really shouldn’t judge the book by its cover especially when criminals like this shooter make such a false, misleading cover.” 

Melanie H continued: “Do not judge a people by an individual — that’s what we Americans are all about. No judging.”


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He doesn’t represent us’: Saudis tweet in solidarity with Americans over Florida Navy base shooting

 Florida shooting ‘nothing to do with gunman’s family, tribe’


“This crime does not represent us as Saudis,” said Sheikh Abdullatif Al-Sheikh, minister of Islamic Affairs, on his personal Twitter account. “We reject such criminal acts and we sympathize with the injured and the families of the victims. It is a horrible crime and a dishonest act.

“We condemn crimes anywhere and anytime, and we stress our complete rejection of such horrible criminal acts which Islam forbids.”

Saudi scholar and Imam of Quba Mosque in Madinah Saleh Al-Maghamsi shared the same notion. He said: “This incident should be stripped away from religion and from the country to which whoever committed this criminal act is affiliated. The Shariah does not approve of this act for it violates the texts of the Holy Qur’an and the teachings of the Prophet, which is based on the principle of no bloodshed. Logic also does not approve of this action.” 

The Organization of Islamic Cooperation (OIC) said the aggressor did not represent the tolerant Islamic values that distinguish the Saudi people and all Muslims who believe in tolerance, moderation and coexistence.

The General Secretariat of the Council of Senior Scholars in Saudi Arabia also condemned the shooting incident in Florida and called it a heinous crime. 

Describing it as a crime against humanity, the senior scholars stressed that such actions were against the true teachings of Islam. They said that the Saudi people will continue to uphold their noble values and contribute to the progress and prosperity of the world and humanity.