Bloomberg: Rising oil prices strengthen Saudi Arabia’s cards, with Biden and...

Bloomberg: Rising oil prices strengthen Saudi Arabia’s cards, with Biden and...
Bloomberg: Rising oil prices strengthen Saudi Arabia’s cards, with Biden and...

London – “Al Quds Al Arabi”: Bloomberg News published a lengthy report on US-Saudi relations prepared by Matthew Martin and Javier Blas, in which they said that the Saudi crown prince, who has a lot of money today, ignores President Joe Biden and sends him a number of messages.
It stated that President Biden had only spoken with King Salman bin Abdulaziz once since entering the White House, and refused to speak with Prince Mohammed bin Salman directly, given the position on him after the killing of “Washington Post” journalist Jamal Khashoggi in 2018.
President Biden has sounded deeply frustrated. Inflation is at its highest level in 30 years in a way that Americans, rich and poor, will feel its impact and may see oil prices rise, and this is a poisonous topic for the White House politically.
“The idea that Russia and Saudi Arabia, two big producers, are not going to pump more oil that would enable people to get to and from work, is not good,” Biden said in October.
US envoys, privately and publicly, tried to persuade the Saudis to pump more oil and quickly, according to officials on both sides. Diplomatic pressure was directed at the 36-year-old prince, who can change the price of oil and the fate of politicians in consuming countries, as he wants. But the prince did not budge despite American diplomatic attempts. He was more concerned with oil supplies and demand than Washington’s needs.
But if Biden wants cheap oil, what the prince wants is a list of demands from the White House, on top of it: access to the administration. “There are a lot of people in the Middle East who want to talk to me,” Biden said last month, without naming the crown prince and “I’m not sure I’m going to talk to them.” In the end, Biden did not get the oil he wanted, forcing him on Tuesday to respond and extract quantities of strategic oil, a decision that carries the risk of escalation from the OPEC+ cartel.
The site believes that Prince Mohammed bin Salman is sitting on what is described as a central oil bank that feels confident to demand attention from Biden and anyone, especially after the recovery in oil prices. The influx of money gives him the ability to make the kingdom a global investment center through the 450 billion owned by the Public Investment Authority, which he chairs and wants to grow its budget to one trillion dollars by 2025. Saudi Arabia in 2020 was looking at the abyss, as the Corona epidemic led to the collapse of oil prices, forcing it to Increase tax rates. A year after the epidemic, oil production and prices increased, which helped the kingdom restore its finances and fill its coffers with new money, which strengthened the prince’s position at home.
“Saudi Arabia is in a strong position,” said Jason Bordoff, dean of the Climate School at Columbia University and a former official in the Barack Obama administration. “Demand for oil is increasing, American shale is no longer what it used to be, and the world will need more Saudi oil for the foreseeable future.”

And in a series of interviews with Arab officials, bankers and diplomats, the picture that emerged from their words is that Saudi Arabia emerged strong from Covid-19, politically and economically. The site believes that the return of Saudi Arabia is linked to the world’s thirst for fossil fuels. The world is still addicted to oil as it was before the epidemic, despite the policies calling for confronting climate change. The level of world consumption returned to 100 million barrels per day, which is the same level in 2019. The price of Brent crude oil increased to $ 80, despite the decision to use US reserve oil. Saudi production will reach 10 million barrels per day next month. and higher than pre-Covid-19 levels. And if oil production continues at its current levels, Saudi oil imports will reach $300 billion in 2022, according to Bloomberg News estimates, which means that Riyadh will be in good shape and its best years. Perhaps it is better because the International Energy Agency believes that the level of Saudi oil production will reach 10.7 million barrels per day in 2022, which is the highest annual production level.

David Randle, a former US diplomat with years of experience in the kingdom, says that high prices “strengthen Saudi Arabia’s position politically and financially” and “Mohammed bin Salman’s position will be safer,” compared to his position years ago.
He rose to power in 2015 after his father’s accession to the throne, first as deputy crown prince and then crown prince in 2017. America was the cause of much of Saudi Arabia’s problems, with the support of Wall Street, about the boom in American shale oil production, the power in her hand, and Texas was in the seat Driving to the energy market, not Riyadh. Months before the rise of Mohammed bin Salman, oil prices collapsed due to the recovery of American production. The price of Brent crude oil fell from $115 in June 2014 to $45 at a time when Mohammed bin Salman followed his father to the palace in January 2015 and then to less than $30 in 2016, and Saudi Arabia was draining its money. Mohammed bin Salman tried to improve the situation by cutting expenditures and announcing Vision 2030 to reshape and diversify the economy. The situation improved for the period between 2017-2018 and helped ease social restrictions, allowing cinemas and granting women the right to drive, but the killing of Jamal Khashoggi in October blew hope bubbles, and a US intelligence report that the Biden administration allowed to publish this year concluded that the Crown Prince The covenant ordered the killing. After being celebrated by international companies, interest subsided, then oil prices fell due to Covid-19 at the beginning of 2020, after it first spread in China and the rest of the world. In the bad years, Saudi Arabia relied on its petrodollars and borrowing to finance the growing fiscal deficit. Its reserves decreased from 750 billion dollars at the peak in 2014, to 437 billion dollars this year, and then increased to 465 billion dollars. With the increase in oil prices, the vision has improved, and the royal palace is planning a budget deficit of 140 billion riyals ($37 billion) in 2021, and with the passage of the third quarter of the year, the deficit was only 5.4 billion riyals, which increased from the perspective of aligning the accounts before the 2023 goal. The financial talk if it will balance its accounts this year, as some analysts expected. “Diversification initiatives are ongoing and will increase as resources become available,” a ministry spokesman said in a statement. Expenditure or tax targets and any surplus through which the debt will be paid or transferred to a sovereign fund will not change. Mohammed bin Salman will have the ability to spend well in the kingdom, and the government has set trillions of expenditures on everything from new cities in the desert to upgrading dilapidated infrastructure in an effort to make the kingdom a financial, commercial and logistical hub in the Middle East. “Oil prices are good for the economy, but not in the old way,” said Mazen al-Sudairi, director of research at Al Rajhi Capital. In the past, the government used oil resources to hire civil servants to reduce unemployment, but today any surplus will be used to boost reserves, not expenditures. In an attempt to put the Kingdom at the center of the region, he resolved his differences with Qatar and began steps of rapprochement with Iran. The prince wants more of the United States to help stop the war in Yemen. And he wants weapons in order for the kingdom to defend itself from the drones that halted half of oil production in 2019. Despite all the improvements that have taken place in the country, Saudi Arabia is still an oil country, and Vision 2030 has only led to modest achievements. Critics say the prince’s favorite projects, such as building an entire city (NEOM) on the Red Sea, drain a lot of money with little revenue. Saudi Arabia would find itself in a bad situation if oil prices collapsed again as a result of another wave of Covid. At the present time, Saudi Arabia appears to be in a safe position, and its alliance with Russia appears to be strong enough to put it in the leadership position in the oil market, thanks to the policies of the half-brother of the Emir and Minister of Oil Prince Abdulaziz bin Salman. “The Saudis feel they are in the driving seat of the oil market,” says Hilma Croft, strategist at RBC Capital Market LLC and former analyst at the CIA. The OPEC + cartel has increased oil production rates in the past months, but Riyadh tried to ensure that the production process takes place more slowly than recovering demand and depleting stocks, and thus increasing oil prices. The stock of crude and net oil in the industrialized countries fell to less than 2.8 billion barrels, the lowest level since 2015. However, Biden continued to avoid talking with Mohammed bin Salman, despite his desire to reduce inflation. The rejection continued even after Saudi Arabia announced that it would reach zero emissions in 2060. “Whatever the United States offers to Mohammed bin Salman, it is not enough for him to pay huge more oil,” said Neil Quilliam of the Chatham Institute in London. Something bigger is pushing the Saudis to change course, and that should include a bilateral meeting between Biden and Mohammed bin Salman.” But the prince did not just ignore the Americans’ request. Riyadh, which says that OPEC + has pumped enough oil to the market, will reject pleas from China, India and Japan to pump more oil. Biden discussed the issue with his Chinese counterpart, Xi Jinping, in their bilateral meeting, and they agreed to work together to stabilize the energy market. A week later, the United States joined with Japan, South Korea and India and released reserves of strategic oil. China is expected to do the same. The Saudis believe that the crisis of tightness in the market will ease next January. They say the price increases are being driven by market fundamentals and a greater shortage of natural gas and coal.

“Oil is not a problem,” Prince Abdulaziz said after a virtual meeting of the OPEC + virtual cartel in November, but “the problem is that the energy complex is going through a state of chaos and hell.” Next week, the prince will chair a meeting of the cartel in order to respond to Biden’s move. And all of this depends on the continued rise in oil prices above $ 80 a barrel, but the OPEC + cartel may respond to the step by delaying new production operations. The report referred to the Future Investment Initiative conference in Riyadh last month and Saudi steps to buy Newcastle United and a stake in racing car maker McLaren. But the increase in high oil prices is a card to support the process of transforming the economy. Jim Crane of Rice University says that Mohammed bin Salman should use today’s wealth to secure the future of the Saudi economy by moving as quickly as possible on the non-oil sectors. And “when oil rents are flowing, it is easy to buy more political support,” which means getting the investments the kingdom wants and progressing under a “disastrous energy transition.”

These were the details of the news Bloomberg: Rising oil prices strengthen Saudi Arabia’s cards, with Biden and... for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV News 24 | The citizen’s account announces the date for...
NEXT Yemen.. “Coalition” announces the destruction of a “secret site” of the...

Author Information

I have been an independent financial adviser for over 11 years in the city and in recent years turned my experience in finance and passion for journalism into a full time role. I perform analysis of Companies and publicize valuable information for shareholder community. Address: 2077 Sharon Lane Mishawaka, IN 46544, USA Phone: (+1) 574-255-1083 Email: Debbieno[email protected]