Saudi oil production surges back to 75 percent of pre-attack level

Saudi King Salman and Bahrain’s King Hamad bin Isa Al-Khalifa reviewed latest regional developments during their talks in Jeddah on Monday. (SPA)
Updated 24 September 2019

Saudi oil production surges back to 75 percent of pre-attack level

  • We can deal with effects of ‘cowardly sabotage,’ king says of drone and missile attacks
  • Two Aramco plants were hit in drone and missile attacks on Sept. 14 that caused fires and significant damage, halving the country’s oil output

JEDDAH: Saudi Arabia has restored more than 75 percent of the production lost after attacks on two oil processing plants and will return to full capacity next week.

The Khurais facility is now producing more than 1.3 million barrels per day and the Abqaiq plant about 3 million, industry sources said. 

Both Aramco plants were hit in drone and missile attacks on Sept. 14 that caused fires and significant damage, halving the country’s oil output. The Kingdom’s ability to quickly restore production demonstrated an important degree of resilience to potentially damaging shocks, the ratings agency Moody’s said.

King Salman said on Monday that Saudi Arabia was able to deal with the effects of what he described as “this cowardly sabotage, that targeted the Kingdom and the stability of global energy supplies.”

He spoke after talks in Jeddah with King Hamad of Bahrain, who denounced the “serious escalation targeting the security and stability of the region.”

Meanwhile, the diplomatic focus on the fallout from the missile strikes moved to New York, where world leaders are gathering for the UN General Assembly. Saudi Arabia and the US have blamed Iran for the attacks, and they were joined on Monday by Britain.

“The UK is attributing responsibility with a very high degree of probability to Iran for the Aramco attacks. We think it very likely indeed that Iran was responsible,” British Prime Minister Boris Johnson said on his way to the US.

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“We will be working with our American friends and our European friends to construct a response that tries to deescalate tensions in the Gulf region,” he said.

However, the UK risks opening a diplomatic rift with other European countries trying to salvage the Joint Comprehensive Plan of Action (JCPOA), the 2015 deal to curb Iran’s nuclear program in return for an easing of economic sanctions. Their efforts have so far failed, with the US withdrawing from the deal and reimposing sanctions.

French President Emmanuel Macron has refused to blame Iran for the Aramco attacks. “One must be very careful in attributing responsibility,” he said on his way to New York.

Macron, Johnson and German Chancellor Angela Merkel held talks on Monday to coordinate their Iran strategy before meetings with US President Donald Trump and Iranian President Hassan Rouhani.

Gulf states, the US, the Europeans and others needed to engage in “collective diplomacy” to defuse tensions, a senior GCC official said.

“The conversation should no longer be about the JCPOA, but Iran’s missile program and its regional misbehavior, which are as important if not more important — they have the potential to hold the region to ransom,” he said.


US trade offensive takes out WTO as global arbiter

Updated 10 December 2019

US trade offensive takes out WTO as global arbiter

  • Two years after starting to block appointments, the US will finally paralyze the WTO’s Appellate Body
  • Two of three members of Appellate Body exit and leave it unable to issue rulings

BRUSSELS: US disruption of the global economic order reaches a major milestone on Tuesday as the World Trade Organization (WTO) loses its ability to intervene in trade wars, threatening the future of the Geneva-based body.
Two years after starting to block appointments, the United States will finally paralyze the WTO’s Appellate Body, which acts as the supreme court for international trade, as two of three members exit and leave it unable to issue rulings.
Major trade disputes, including the US conflict with China and metal tariffs imposed by US President Donald Trump, will not be resolved by the global trade arbiter.
Stephen Vaughn, who served as general counsel to the US Trade Representative during Trump’s first two years, said many disputes would be settled in future by negotiations.
Critics say this means a return to a post-war period of inconsistent settlements, problems the WTO’s creation in 1995 was designed to fix.
The EU ambassador to the WTO told counterparts in Geneva on Monday the Appellate Body’s paralysis risked creating a system of economic relations based on power rather than rules.
The crippling of dispute settlement comes as the WTO also struggles in its other major role of opening markets.
The WTO club of 164 has not produced any international accord since abandoning “Doha Round” negotiations in 2015.
Trade-restrictive measures among the G20 group of largest economies are at historic highs, compounded by Trump’s “America First” agenda and the trade war with China.
Phil Hogan, the European Union’s new trade commissioner, said on Friday the WTO was no longer fit for purpose and in dire need of reforms going beyond just fixing the appeals mechanism.
For developed countries, in particular, the WTO’s rules must change to take account of state-controlled enterprises.
In 2017, Japan brought together the United States and the European Union in a joint bid to set new global rules on state subsidies and forced technology transfers.
The US is also pushing to limit the ability of WTO members to grant themselves developing status, which for example gives them longer to implement WTO agreements.
Such “developing countries” include Singapore and Israel, but China is the clear focus.
US Commerce Secretary Wilbur Ross told Reuters last week the United States wanted to end concessions given to then struggling economies that were no longer appropriate.
“We’ve been spoiling countries for a very, very long time, so naturally they’re pushing back as we try to change things,” he said.
The trouble with WTO reform is that changes require consensus to pass. That includes Chinese backing.
Beijing has published its own reform proposals with a string of grievances against US actions. Reform should resolve crucial issues threatening the WTO’s existence, while preserving the interests of developing countries.
Many observers believe the WTO faces a pivotal moment in mid-2020 when its trade ministers gather in a drive to push through a multinational deal — on cutting fishing subsidies.
“It’s not the WTO that will save the fish. It’s the fish that are going to save the WTO,” said one ambassador.