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.


Japan’s ‘Suganomics’ will target quick wins, not grand visions

Japan’s Prime Minister Yoshihide Suga, center, with cabinet ministers this week. Suga’s plans for structural reforms will focus more on spurring competition, rather than deeper social change. (AP)
Updated 19 September 2020

Japan’s ‘Suganomics’ will target quick wins, not grand visions

  • New prime minister to build political capital in lead-up to introducing tougher reforms, officials say

TOKYO: Japan’s new prime minister will pursue economic structural reforms through a mixed bag of policies that target specific industries, rather than a grand strategy to reshape society and boost long-term growth.

Armed with a strong grip on Japan’s bureaucracy, Yoshihide Suga knows which levers to pull to get results, say government and ruling party officials who know him or have worked with him.
But an initial need to consolidate popular support means he will first target quick policy wins that will later give him the political capital to pursue tougher reforms, they said.
“He isn’t after visions. He’s someone who wants to accomplish small goals one by one,” said political analyst Atsuo Ito, a former ruling party staffer. “He’ll initially focus on pragmatic goals that directly affect people’s livelihood.”
Suga has said he will continue his predecessor Shinzo Abe’s pro-growth “Abenomics” strategy aimed at pulling Japan out of deflation with heavy monetary and fiscal stimulus coupled with structural reforms.
But unlike Abe, Suga’s plans for structural reforms will focus more on spurring competition, rather than deeper social change.
For Suga, economic reform will be a political priority in its own right, unlike Abe, whose reforms were wrapped up in a broader political agenda that included the thorny challenge of revising Japan’s pacifist constitution.
Suga must act quickly as his current term lasts for only for a year unless he calls a snap election to win the public’s mandate to run a full, three-year term.

HIGHLIGHTS

• Reform mix of ideas rather than grand strategy.

• Suga armed with strong grip on bureaucracy.

• Targets “quick-hit” reforms appealing to voters.

• Plans include consolidating small firms, lenders.

That means he will first seek “quick-hit” achievements that directly channel money to households. Among the sweeteners would be to slash cellphone charges by about 40 per cent, raise the minimum wage and increase payouts to cushion the blow from the pandemic.
“At this moment, he has to focus on very short-term issues like how to stimulate economy,” said Heizo Takenaka, who served in the cabinet of reformist former premier Junichiro Koizumi.
Removing protections in industry will be one such objective, even if that riles some parts of corporate Japan.
“Introducing competition among mobile phone carriers could be a very symbolic policy for Suga because he loves competition,” said Takenaka, who retains close contact with Suga. “He hates people with vested interests.”
If successful, Suga could pursue bolder reforms such as liberalising the heavily protected medical sector, consolidating weak regional banks and breaking barriers that hamper competition among small- and mid-sized firms.
Having served as Abe’s top spokesman, Suga already knows his way around Japan’s massive bureaucracy.
Suga relaxed visa requirements to boost inbound tourism, overcoming push-back from the justice ministry. He also cut through bureaucratic opposition and expanded a scheme that gave tax breaks for donations to Japan’s regional areas.
“Suga may not be charismatic, but he gets things done,” said Taimei Yamaguchi, a ruling party lawmaker close to Suga. “Some of the best advice I got from him was to make the most of the expertise the bureaucrats have.”
Some government officials say Suga’s focus on deregulation makes his policies closer to those of Koizumi, who consolidated big banks and deregulated the labor market in the early 2000s.
Suga’s slogan urging the public to “look after yourself before seeking government help” reflects his background as a self-made politician who made his way up from a son of a strawberry farmer to Japan’s leader, people who know him say.