Saudi Arabia oil exports to hit 10.6m barrels

In this file photo taken on September 20, 2019 a general view of Saudi Aramco's Abqaiq oil processing plant is seen on September 20, 2019. (AFP)
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Updated 31 March 2020

Saudi Arabia oil exports to hit 10.6m barrels

  • The Kingdom intends to increase its crude oil exports starting in May, by about 600,000 barrels per day

DUBAI: Saudi Arabia is to boost exports of crude oil to a record high in a new show of strength on international energy markets.

From May, the Kingdom will export about 600,000 more barrels of oil per day on top of the current level of 10 million barrels, even as demand and crude prices have been falling.

The extra exports have been made possible by switching to gas for domestic energy generation, and by lower domestic demand caused by the coronavirus pandemic, an energy ministry official said.

Global demand for crude is down as much as 20 percent by some estimates because of stalled economic activity. Oil prices on International markets were volatile again yesterday. Brent, the Middle East benchmark, dipped sharply before closing up by about 5 percent at just over $26 per barrel. West Texas Intermediate, the US standard, fell below the significant $20 per barrel level. It recovered slightly, but still closed about 8 percent down.

US and Russian presidents Donald Trump and Vladimir Putin discussed both oil prices and the coronavirus pandemic in a telephone conversation on Monday.

Trump said he was concerned about the effect of falling prices on the US oil industry, which has higher costs than either Saudi Arabia or Russia. “We don’t want to have a dead industry,” he said. “I never thought I’d be saying that maybe we have to have an oil price increase, but we do.”

However, experts said the new Saudi export levels were a sign that there would be no early truce in the “oil price wars” following the end of the Saudi-Russia alliance to limit output. On top of already announced discounts, the export increase “will translate into a very low price for Saudi crude,” Olivier Jakob, director of Swiss-based energy consultancy Petromatrix, told Arab News.

Others said the Kingdom’s strategy of taking market share at the expense of high cost producers, especially in the US, was beginning to pay off. The strategy was a “game theory masterstroke” that would re-assert Saudi dominance of global energy markets, said Antoine Halff of the Columbia University Center on Global Energy Policy.


$8bn blow to Erdogan as investors flee Turkey

Updated 09 July 2020

$8bn blow to Erdogan as investors flee Turkey

  • Overseas holdings in Istanbul stock exchange are at lowest in 16 years

ANKARA: Foreign capital is flooding out of Turkey in a massive vote of no confidence in President Recep Tayyip Erdogan’s economic competence.
Overseas investors have withdrawn nearly $8 billion from Turkish stocks since January, according to Central Bank statistics, reducing foreign investment in the Istanbul stock exchange from $32.3 billion to $24.4 billion.
As recently as 2013, the figure was $82 billion, and foreign investors now own less than 50 percent of stocks for the first time in 16 years.
“Foreign investment has left Turkey for several reasons, both internal and external,” Win Thin, global head of currency strategy at Brown Brothers Harriman, told Arab News.
“Externally, investors fled riskier assets like emerging markets during the height of the coronavirus pandemic. Some of those flows are returning, but investors are being much more discerning and Turkey does not seem so attractive.”
In terms of internal factors, Thin said that Turkish policymakers had made it hard for foreign investors to transact in Turkey. “This includes real money clients, not just speculative.
“By implementing ad hoc measures to try and limit speculative activity, Turkey has made it hard for real money as well. Besides these problems, Turkey’s fundamentals remain poor compared to much of the emerging markets.”
Erdogan allies claim international players are manipulating the Istanbul stock exchange through automated trading, and have demanded action to make it difficult for them to trade in Turkish assets.
Goldman Sachs, JPMorgan, Merrill Lynch, Barclays and Credit Suisse were banned this month from short-selling stocks for up to three months, and this year local lenders were briefly banned by the banking regulator from trading in Turkish lira with Citigroup, BNP Paribas and UBS
JPMorgan was investigated by Turkish authorities last year after the bank published a report that advised its clients to short sell the Turkish lira.
MSCI, the provider of research-based indexes and analytics, warned last month that it may relegate Turkey from emerging market status to frontier-market status because of bans on short selling and stock lending.
With the market becoming less transparent, overseas fund managers, especially with short-term portfolios, are unenthusiastic about the Turkish market and are becoming more concerned about any forthcoming introduction of other liquidity restrictions.
The exodus of foreign capital is likely to undermine Turkey’s drive for economic growth, especially during the coronavirus pandemic when employment and investment levels have gone down, with the Turkish lira facing serious volatility.