Saudi oilfield attacks ‘had zero impact on economy,’ says finance minister

Saudi Finance Minister Mohammed Al-Jadaan. (SPA)
Updated 19 September 2019

Saudi oilfield attacks ‘had zero impact on economy,’ says finance minister

  • Weekend strikes failed to interrupt market supply or revenue flow, Kingdom’s finance minister says

LONDON: Saudi Finance Minister Mohammed Al-Jadaan said that the weekend attacks on the Kingdom’s oil infrastructure would have “zero” impact on the country’s economy as concerns about global oil supplies eased.

“In terms of revenues there is zero impact,” Saudi Finance Minister Mohammed Al-Jadaan told Reuters in an interview on the sidelines of an investor conference in Riyadh.

“Aramco continued to supply the markets without interruption and therefore revenues should continue as they are.”

In a separate interview with Bloomberg, Al-Jadaan said that after a boost to state spending, the government was “seeing momentum” in the non-oil economy and that he expected the sector to hit the 2.9 percent expansion forecast by the International Monetary Fund. Oil prices retreated after the comments, having jumped more than 20 percent at one point on Monday — the biggest spike since the 1990-91 Gulf War.

The International Energy Agency (IEA) said on Wednesday it remained in regular contact with authorities in Saudi Arabia and that for now, markets remain well supplied with ample stocks available. 

IEA member countries hold about 1.55 billion barrels of emergency stocks in government-controlled agencies, which amount to 15 days of total world oil demand. 

In addition, IEA member countries also hold 2.9 billion barrels of industry stocks as of the end of July, a two-year high that can cover more than a month of world
oil demand, the Paris-based agency said.

These stocks include about 650 million barrels of obligated emergency stocks, which can be made immediately available to the market when governments lower their holding requirements.

“Recent events are a reminder that oil security cannot be taken for granted, even at times when markets are well supplied, and that energy security remains an indispensable pillar of the global economy,” said Fatih Birol, the IEA’s executive director.

“This is why the IEA remains vigilant about the risk of disruptions to global oil supplies.”

The Saudi stock market gained 0.6 percent on Wednesday and Saudi dollar-denominated bonds also recovered after retreating on Monday. Earlier Commerzbank said that the oil price rally that followed the attacks was not sustainable and, despite rising regional tensions, lowered its 2020 price forecasts because of slowing demand growth.

The bank cut its Brent forecast for next year by $5 to $60 per barrel and kept its 2019 outlook unchanged at $65.

It also reduced its 2020 forecast for WTI to $57 from $62. Commerzbank forecast WTI to average $58 this year, Reuters reported.

While the attacks had “painfully demonstrated the risks to oil supply,” raising the possibility of short-term price spikes, prices should fall again in the coming weeks as long as there is no “total escalation of the situation,” analysts said.

 


Oman said to mull new regional airline

Updated 22 October 2019

Oman said to mull new regional airline

DUBAI: Oman is considering setting up a new regional airline that could take over domestic operations from state carrier Oman Air, two sources familiar with the matter told Reuters.

A request for proposal was issued this month by state entity Oman Aviation Group for a feasibility study into operating the new airline, “Oman Link,” the sources said.

Setting up a new airline for domestic flights would allow Oman Air to focus on its international network where it competes with large Gulf carriers Emirates, Qatar Airways, and Etihad Airways.

The new airline could partner with Oman Air with both carriers connecting passengers to each other but would have its own independent management, the sources said on the condition of anonymity because the details are private.

Proposals are to be submitted by Nov. 11, one of the sources said.

The new airline would use regional jets for domestic flights and potentially later to other cities in the region where there is not enough demand to fill the larger single aisle jets used by other airlines in Oman.

FASTFACT

Oman Air operates flights to four airports in the country, including the main Muscat International.

Oman Aviation Group and its unit Oman Air did not respond to separate emailed requests for comment.

Oman Air operates flights to four airports in the country, including the main Muscat International, according to its website.

The airline uses 166-seat Boeing 737 jets and 71-seat Embraer E175 aircraft on domestic and regional flights.

Both aircraft types are too costly to consistently operate domestic routes at a profit, according to industry sources.

Oman has been restructuring its aviation sector in recent years. Oman Aviation Group was formed in 2018 and includes Oman Air, Oman Airports and Oman Aviation Services.

A budget, second airline, Salam Air, was launched in 2017. It is owned by Omani government pension funds and the Muscat municipality.

Last week, Eithad and Air Arabia said they were jointly setting up a low cost carrier in Abu Dhabi.