Breakingviews

Oil price floor could be a long way down

By Edward Hadas
January 13, 2015

Petro-economics are painfully simple for producers. Lower prices hardly push up demand. And it will take a price below $30 a barrel before supply falls enough to balance the market. Unless producers can regroup into an effective cartel, their suffering will continue.

Even a weaker Islamic State will drag on economy

By Edward Hadas
December 23, 2014

Cheap oil may now be the biggest worry for Middle Eastern economies, but the struggle against the radical group also has the potential to undermine growth. Even if IS has peaked, its ideology remains a problem, especially for Iraq and Turkey. Iran could end up gaining ground.

Jumbo $6 bln bank IPO shows Saudi too big to miss

October 7, 2014

The sale of shares in the kingdom’s top bank will be the largest this year after Alibaba. A few foreign investors may share some of the upside. For most, it’s a reminder of the opportunities on offer when the $584 bln market opens more fully to outsiders next year.

Biggest risk of geopolitics is as a distraction

By Edward Hadas
June 26, 2014

Fears that war and foreign policy chaos will disrupt the global economy have insidiously crept into the minds of investors, Barclays discovered. In reality, despite deterioration in the Middle East, the global balance is broadly positive. There are bigger things to worry about.

Iraq troubles are unlikely to bring new oil crisis

June 24, 2014

The continued violence looks like a harbinger of a sharp cutback from one of the world’s major oil producers. But the bulk of Iraq’s production is still secure. The Middle East is clearly becoming less stable, but it would take a cascade of problems to create a big price shock.

Middle East turmoil perpetuates OPEC charade

September 5, 2013

Increasing energy supply from North America might have caused a global glut. But a steady stream of crises - in Iran, Iraq and Libya - has restrained OPEC’s output, and spared the cartel the difficulty of enforcing strict quotas on its more unruly members.

West faces only high-cost options in Syria

August 28, 2013

Surgical strikes against the Assad regime’s military facilities may aim to undermine its ability to deploy chemical weapons. There would be a price for doing nothing, but action is fraught with risks and could exacerbate regional instability.

Target shortage feeds desperate Mideast telco M&A

March 26, 2013

Bahrain’s incumbent telco is eyeing a stake in part of India’s Reliance after agreeing to buy assets from Cable & Wireless. Stiff competition at home is forcing tiny Batelco further afield. The snag is that there are too many big telcos in the region chasing too few assets.

Iraq offers investors ultra-high risk-reward bet

February 20, 2012

When war ends, investment opportunity begins. There has been enough peace in Iraq for the Baghdad bourse to rise 32 pct over two years, outperforming bigger Middle East rivals. The risks are huge, but reconstruction, demographics and oil make this frontier market tempting.

Gulf stock markets head for lost half-decade

February 1, 2012

Four years of tough times look set to turn into five. Indices are down as much as 80 pct since 2008 and volumes are desperately thin. Good dividend yields and low valuations are failing to stir investors. Without big changes, Gulf equity markets will remain a lost cause.