Breakingviews

Saudi reshuffle points to era of oil volatility

May 9, 2016

Ali al-Naimi, just fired as oil minister, was the architect of a bitter price war but also had successes reaching consensus with OPEC. His successor Khalid al-Falih may lack the same influence. It suggests a more centralised Saudi establishment, but more discord in oil markets.

Saudi’s sweet debt deal could rebound on banks

April 21, 2016

The kingdom is close to its first international debt deal in 25 years to plug a hole in its finances caused by weak oil prices. Vast oil reserves make Saudi debt enticing, but the price slump is changing the game in several ways. And Middle East states have defaulted before.

Saudi U.S. selloff threat not to be trifled with

April 20, 2016

The kingdom has told lawmakers it would dump some $750 bln of assets should Congress pass a bill allowing 9/11 victims to sue. These funds are its last line of defense to lower oil prices. That the alternative - having assets frozen - is an even worse outcome is scarier still.

Iran more red herring than black swan for oil

March 29, 2016

Despite lifted sanctions and a more moderate government, Tehran lacks the investment to deliver a boost to supply. Next month’s unofficial OPEC meeting may produce an output freeze. With Russia also less liable to increase its flows, pressure on prices looks more up than down.

Iran election is key driver of oil price recovery

February 25, 2016

Iranians will on Feb. 26 vote in the first election held since a deal with the U.S. to lift sanctions. Elect moderates and Iran could increase output, keeping global oil prices low. Go for hardliners, and the gush could be a trickle – and help OPEC reverse the slump.

Arab winter has become markets’ chief worry

January 15, 2016

Trouble brewing in the Middle East is fast turning into financial markets’ biggest anxiety. Sectarian divisions, the rise of radical Islam and plummeting oil prices are threatening to rip the region apart. International markets suffer too as Arab money is spirited back home.

Saudi Aramco IPO could herald a Riyadh garage sale

January 12, 2016

The IPO of a strategic stake in Saudi Aramco could be the start of a kingdom-wide selloff of state assets. The government owns stakes in locally listed firms worth $170 billion. By spinning these off to compensate for lower oil revenue, it could fund years of budget deficits.

Saudi Aramco IPO carries big investor risks

January 8, 2016

Saudi Arabia has whetted the appetite of potential shareholders with the prospect of listing shares in its state oil company. A sale would give investors access to 18 pct of the world’s oil reserves but little say in how the company is run. The risks could outweigh the rewards.

Oil will blow past $80 a barrel in 2016

December 30, 2015

Low-cost OPEC producers will win the hydrocarbon price war because they can fight harder for longer. For now, OPEC is flooding the market with cheap crude. But it is building power over prices by making rival output uneconomic. The next big move in the oil price will be up.

Arab sovereign wealth fund exodus just beginning

December 29, 2015

Oil-dependent Gulf sheikhdoms need money to shore up their budgets. They’ll hold on to trophy assets like stakes in VW or Barclays for as long as possible. But if the price of crude keeps sliding to $20, the region’s rulers might need to liquidate their rainy-day funds by 2020.