Monday, March 16, 2020

SAUDI OIL PROFITS PLUMMET - THE BEGINNING OF THE END FOR THE MUSLIM DICTATOR MOHAMMED BIN SALMAN

THESE ARE THE SHITBAG MUSLIMS WHOSE BORDERS WE HAVE DEFENDED FOR TWO YEARS. THE VERY SHITBAG SAUDIS THAT THE BUSH CRIME FAMILY STARTED TWO WARS TO PROTECT AFTER THE SAUDIS INVADED US 9-11

MBS: The Rise to Power of Mohammed bin Salman
Ben Hubbard. Random House/Duggan, $28 (384p) ISBN 978-1-9848-2382-3
Journalist Hubbard debuts with an incisive portrait of modern Saudi Arabia and 34-year-old crown prince Mohammed bin Salman, better known by his initials MBS. Though much about MBS’s early years remains unknown, Hubbard details his close relationship with his father, the governor of Riyadh, following the untimely deaths of two of MBS’s older half-brothers, and his willingness to threaten with violence those who don’t fall in line. After his father’s ascension to the throne in 2015, MBS took control of the royal court and became minister of defense. He implemented ambitious social and economic reforms, including rolling back the kingdom’s ban on women drivers, and courted Western investors with plans to build a $500 billion “smart city” near the Red Sea. He also declared war on the Houthi rebels in Yemen, escalated tensions with Iran and Qatar, detained hundreds of ministers and royal family members in the Ritz-Carlton hotel in a move billed as an anti-corruption push, and empowered underlings to aggressively silence dissidents—a campaign that led to the slaying of journalist Jamal Khashoggi in Saudi Arabia’s Turkish consulate in 2018, severely damaging MBS’s international reputation. Hubbard enriches the narrative with informed discussions of Saudi history and culture, illuminating the kingdom’s complex blend of religious fundamentalism and technological ambition. This deeply researched and vividly written account provides essential insight into a figure poised to lead the region for the next half century. (Mar.)

Saudi Arabia's crown prince responds to coronavirus by getting rid of enemies


David A. Andelman
Saudi Arabian Crown Prince Mohammed bin Salman is facing some existential problems. He's losing the war in Yemen, the coronavirus has forced him to scale back visits by millions to the holy cities of Mecca and Medina, and the plummeting price of oil on the back of a supply war with Russian President Vladimir Putin are together shaking the most fundamental underpinnings of his leadership — not to mention threatening a global recession.
So what does he do? He takes a leaf out of President Donald Trump's playbook by getting rid of some of his most (allegedly) troublesome opponents. Instead of a simple purgehowever, the crown prince, known by his initials, MBS, took the far more dramatic step of arresting his cousin, Prince Mohammed bin Nayef; his uncle, Prince Ahmed bin Abdelaziz, as well as one of Nayef's brothers and one of Abdelaziz's sons. The first two have been charged with treason, which carries the death penalty. The crown prince was already in hot water for allegedly ordering the execution-style slaying of Washington Post columnist Jamal Khashoggi. But with this escalation, the Saudi leader is pushing the boundaries once again to see what exactly he can get away with.
All these issues have been brewing for some time. The crown prince has given no quarter in five years of war in Yemen, which has turned very much into a proxy war with Iran — each power supporting opposing factions for control of this strategic corner of the Arabian peninsula.
The Saudis have long been watching anxiously as demand for oil ratcheted down and new energy sources, particularly from the United States, have come online. With the onset of the coronavirus pandemic, demand for oil has plunged even further.
To hold prices in line, the Saudis called an emergency meeting last week of the OPEC oil cartel to lower production quotas. Russia balked at OPEC's demand, led by Saudi Arabia, to cut 1.5 million barrels a day in output and stabilize prices at $40 a barrel. Putin has no problem with low oil prices, since Russia's cost of production is under $20 a barrel. But he would like to see America's fracking efforts — an already costly proposition to — become uneconomical.
Without a deal, Saudi Arabia said it would sell oil to China for a discount and potentially raise its own output by as much as 2 million barrels a day — moves that would result in flooding the market with oversupply. Oil prices around the world plummeted more than 25 percent Monday to $31 a barrel. Since oil still underpins the Saudi economy, accounting for 50 percent of its GDP and some 70 percent of its export earnings, this is a serious gamble for the crown prince, who has pledged to modernize and diversify his country's financial future.
And then along came the coronavirus. Here the crown prince has been forced to make some of the toughest decisions of his career. The one that has already sent shock waves through the Islamic world was his decision to suspend the year-round umrah pilgrimage in which as many as 20 million faithful — most from Saudi Arabia itself — take part every year. This has also raised the question of whether the annual hajj pilgrimage, which attracts millions Muslims more from every corner of the globe, would be allowed at the end of July.
Throughout, criticism of the crown prince has quietly been mounting at home. He wants desperately to succeed his father on the throne; King Salman is now 84 and said to be frail. Still, the day after the arrest of the four princes stunned the kingdom, the king was shown in photos released by the royal palace to be in good health, receiving foreign ambassadors and reading state documents. Perhaps the king is anxious to remain in power to welcome world leaders to the G-20 summit in Riyadh in November.
What has allowed the crown prince such a free hand? Certainly he has benefited from the unalloyed support of his father, who seems to accept his son's overt power grabs. Unanimity is vital since the next king is not chosen until the previous one has died. The crown prince clearly wants nothing left to chance.
But he also has innumerable enablers — world leaders and business leaders alike — who have repeatedly failed to confront the leader. Amazon's Jeff Bezos was photographed beaming next to him not long before the crown prince was revealed to have ordered the disastrous hacking of Bezos' cellphone.
Trump is a particularly bad offender. Trump has never fully accepted the conclusions of his own intelligence system that the crown prince personally ordered the savage murder and dismemberment of Khashoggi. Not surprisingly, Trump said nothing about the arrest of the four senior royals this past weekend.
But the crown prince's manipulations — and Trump's inaction — have a price. In the early morning hours on Tuesday, the prince and Trump talked on the phone, according to a White House official. Hours later, the Saudi prince flooded the oil market, hammering world stock, bond and currency markets.
This price war, of course, has implications for Trump's own re-election in November — especially if it threatens the American oil industry, which employs some 9.8 million American workers and is projected to add as many as 1 million more U.S. fracking jobs in the next five years.
The crown prince and Trump are currently facing a very similar set of challenges: The coronavirus threatening Americans at home and Muslims in Mecca and Medina; oil price and supply disruptions affecting the economies of both nations; unresolved and increasingly expensive wars respectively in Afghanistan and Yemen.
Perhaps now is the time to begin to break that circle of dependency before an impending crisis becomes a real crisis.

 Oil giant Saudi Aramco sees 2019 profits drop 20% to $88.2B
JON GAMBRELL
 
 
 
 
Oil price plunge is huge problem for U.S. shale producers
DUBAI, United Arab Emirates (AP) — Oil giant Saudi Aramco said Sunday its profits dropped 20% in 2019 to $88.2 billion, a sharp decline coming as the kingdom stands ready to flood an already-weakened global energy market amid the new coronavirus pandemic.
The announcement by the firm formally known as the Saudi Arabian Oil Co. did not address the kingdom's plans to crank up production to record levels after a meeting earlier this month between OPEC and Russia failed to see nations agree to a production cut. That led to a 25% plunge in the price of crude, the sharpest decline seen since the 1991 Gulf War, and fears of a price war furthering dragging down the market.
International benchmark Brent crude traded over $33 a barrel Sunday, with analysts worried the price could further drop. While that makes gasoline cheaper for consumers and airlines, it also affects U.S.-based oil companies and others now struggling with lower economic growth amid the virus pandemic.
In its results, Aramco blamed lower crude oil prices and declining margins for its chemical sales for lowering profits.
Saudi Aramco reported a profit of $88.2 in 2019, down from $111.1 billion in 2018.
Capital expenditure was down in 2019 to $32.8 billion compared to $35.1 billion the year before. Aramco expects to spend between $25 billion to $30 billion this year, down some $10 billion than previous estimates.
It “was an exceptional year for Saudi Aramco," President and CEO Amin H. Nasser said in a statement. "Through a variety of circumstances – some planned and some not – the world was offered unprecedented insight into Saudi Aramco’s agility and resilience.”
The publicly released figures mark a new turn for the firm, which previously was a private company owned directly by the Al Saud ruling family that didn’t need to announce results. It now must release figures after listing a sliver of its worth on Riyadh’s Tadawul stock exchange.
Aramco initially listed on the Tadawul in December at 32 riyals ($8.53) a share, giving the company a valuation of $1.7 trillion. Initial days of trading saw shares rapidly rise, briefly giving the company the $2 trillion valuation long sought by Crown Prince Mohammed bin Salman, who hoped listing the firm would give the kingdom cash for his economic development plans.
In the time since, however, the stock has plunged. It traded Sunday around 29 riyals ($7.73) a share, giving it a valuation of $1.54 trillion.
Stark challenges, however, loom ahead. The collapse of the so-called OPEC-Plus deal this month ended a three-year agreement that propped up oil prices. Now, Saudi Arabia appears poised to flood traders with its oil to claw back market share.
The Saudis have slashed oil prices and said they’d ramp up production to 12.3 million barrels a day in April, a record. The Saudi government also directed Aramco to increase output capacity to 13 million barrels a day. While it costs Saudi Arabia under $10 a barrel to produce its oil, the kingdom's government budgets for this year had projected oil at $55 a barrel, signaling that cuts are likely.
The UAE, home to Abu Dhabi and Dubai, meanwhile said it would stand ready to increase production to 4 million barrels of crude a day, up from the 3 million it now pumps.
“The onslaught of crude to hit markets in a few weeks will be enormous, swelling inventories to unprecedented levels,” warned Emirates NBD, a Dubai-based bank majority owned by the sheikhdom's government.
The Aramco results did not address the current turmoil in the market. However, Nasser did comment on the new coronavirus and the COVID-19 illness, which already has depressed demand for jet fuel and slowed the Chinese economy.
“The recent COVID-19 outbreak and its rapid spread illustrate the importance of agility and adaptability in an ever-changing global landscape,” Nasser said.
Also expected in 2020 is Saudi Aramco closing its $69.1 billion purchase of a 70% stake of the petrochemical company SABIC from the kingdom's Public Investment Fund.

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