The upcoming meeting of OPEC member states on June 2 will generate lots of discussion about the current slump in global oil prices. What it probably won’t do is yield any action to reverse it. For the time being, the animosity between Iran and Saudi Arabia seems to be too deep-seated to accommodate any change in global production levels. I review this upcoming meeting for The Mark News, read it here.
The appointment of Khalid al-Falih as Saudi Arabia’s minister of energy, industry and mineral resources comes as no surprise. He is the most qualified person to replace the brilliant Ali al-Naimi who served as minister of petroleum and mineral resources for over twenty years. Yet, what does it mean for Saudi Arabia’s energy policy? I recently addressed this issue in a piece for The Atlantic Council. Read it here.
The international oil market has been in a state of chaos over the past two years. Last month, delegates from the 13 OPEC member nations and five other major producers met to discuss a production freeze agreement that might shore up global prices. Once again, they came away empty-handed. I spoke with the Cipher Brief on why there was a failure at Doha, Russia’s relationship with Saudi, and what Saudi Arabia really thinks about US shale. Read the full interview here.
The low-price global oil markets have the potential to reshape the fundamental governance system of Saudi Arabia. In my new report for the Atlantic Council, “Saudi Energy Changes: The End of the Rentier State,” I discuss how, as a result of shrinking income from oil, “It seems . . . that the country is moving away from being the epitome of a rentier state to resembling more closely the economies of the more developed nations of the G20, of which Saudi Arabia is a member.”
Saudi Arabia currently fuels its stunning 8 percent annual rise in demand for electricity with precious crude oil due to little low cost domestic natural dry gas reserves. Iran’s vast gas reserves could be used to meet the kingdom’s growing needs, but after decades of punishing sanctions its dilapidated gas fields need an estimated $250 billion in repairs. If Saudi Arabia used its investment power or buying power to help revitalize Iran’s gas industry, it would both secure the energy it needs to meet its citizens’ demands and free up its crude oil for export. While the sectarian rhetoric hurled back and forth may seem unstoppable and the timeline for reconciliation may be long, both sides are rational at heart. Indeed, the benefits of economic cooperation on energy issues could open up better relations on a range of issues. I discuss this issue at length in my new Policy Brief for the Atlantic Council.
Since King Salman bin Abdulaziz took the throne after the death of his half brother Abdullah in January, there have been many important changes in government and economic structure, most notably in the oil sector. While many of the bureaucratic changes have been widely assessed, it is the changes in the oil sector that have puzzled even seasoned observers, rendering the deciphering of oil policy in the kingdom even more difficult than the historical norm. In this piece for The Arab Gulf States Institute in Washington, I assess these changes, and their impact on the Kingdom’s oil policy. Link here.
The success of the Geneva talks between the P5+1 and Iran is widely reported as being opposed by Israel and by the Gulf States, especially Saudi Arabia. Three important princes1have leveled much criticism against US policy in the Middle East, especially as regards Syria and Iran. However, it seems that no open criticism has been coming from the inner circle of major decision-makers in the Saudi Kingdom. In fact on November 25, the Saudi government issued a low-key statement of support to the Geneva agreement. Undoubtedly, Saudi Arabia feels threatened bywhat it perceives as Iran’s hegemonic tendencies, which from the Saudi point of view include the development of nuclear weapons and the establishment of a Shi’a crescent composed of Iran, Iraq, Syria and Lebanon. This crescent is perceived as threatening by the Gulf monarchies. For Saudi Arabia, the Shi’a crescent and the development of nuclear weapons in Iran are the two faces of the same coin: the Iranian threat.
I explore these thoughts more for the Norwegian Institute of International Affairs, Link here.
I’ve recently published a piece for the Middle East Institute on the possibilities of reconciliation in Bahrain based upon my lecture there one year after the beginning of the uprising. Please read it here: Is Reconciliation in Bahrain Possible?
Here I am on Al Jazeera English’s “Inside Story,” one year after the start of the uprising in Bahrain
I have been following closely the dramatic developments in Bahrain since February of this year. Below are some of my recent analyses:
- An Exclusive Interview with the Bahrain Mirror – “The solution is in a joint Saudi-Iranian-Iraqi Initiative” Read it here (in Arabic)
- “Crackdown in Bahrain” in Foreign Policy on 17 February 2011 – “The Khalifa leadership is faced with the choice of truly liberalizing or risking outside intervention — which would mean a grave loss of their position, and a potential catastrophe for the United States as well.” Read it here
- “The Center or Bust: Will the Various Forces in Bahrain Finally Compromise on a Centrist Approach to Power?” in Jadaliyya on 8 March 2011 – Read it here
- “Saudi Arabia Strikes Back” in Foreign Policy on 14 March 2011 – “Their decision to intervene directly in Bahrain’s affairs suggests a weakness in the Saudi leadership and Riyadh’s surrender to the more conservative elements in the country.” Read it here
- On TVO’s Agenda with Steve Paikin, “Battleground Bahrain” Watch it here