“To view engagement with Saudi Arabia and energy security as asking for oil is simply wrong,” said White House press secretary Karine Jean-Pierre on 13 June.
“I’m doing all I can to increase the supply. The Saudis share that urgency,” US President Joe Biden told reporters on Friday.
The contradiction in these statements exposes the US administration’s dilemma: what does it really want from Saudi Arabia in oil, and what is it prepared to offer in return? At least as importantly, what is Riyadh able and willing to deliver, and what risks does it run?
A past episode illustrates this conundrum. In April 2005, the then Saudi crown prince Abdullah bin Abdulaziz visited the US oil centre of Texas to meet George W Bush, who was president at the time. As now, the two countries were at loggerheads. Crown prince Abdullah was angered by the US invasion of Iraq and Mr Bush’s lack of attention to the Arab Peace Plan that had been proposed in 2002.
In further echoes of today, the oil price had reached then uncomfortably high levels around $50 a barrel, and Saudi Arabia said it was not capable alone of reducing it to a previous target of $22-28 a barrel. The kingdom had said at the time that constraints on US refineries meant that solely increasing crude production would not help.
Saudi Arabia did present a plan to increase its capacity to 12.5 million barrels per day by 2010 and to 15m bpd during the teens from about 10m bpd. It would do this by spending $50 billion — a lot of money in those days.
It did indeed fulfil the first part of this commitment with development of the giant Khurais, Manifa and other fields. But after prices soared to the nominal record of $147 a barrel in July 2008, they slumped in the global financial crisis and Saudi Arabia had to cut production along with its Opec allies. The expansion was not used in full until around 2016 and in April 2020, and even then, only briefly.
Now, as with the meeting between the US and Saudi Arabia in 2005, Mr Biden leaves Jeddah without any public commitments on oil output. Riyadh has confirmed there will be no unilateral policy changes before the next Opec+ meeting on August 3. And the course of the organisation’s production is already set up to September, barring any sudden change of heart.
Crude oil, petrol and diesel prices have all come down since early June and Mr Biden’s threatening words to oil companies, though not as much as he may wish.
The culprit is not the president’s tough talk, but fears of rising interest rates, signs of fuel demand destruction in the US, worries over the Chinese economy, and the global economy sliding into a recession. Global crude inventories have flattened out, suggesting a market for now in rough balance.
Saudi Aramco announced in March 2020 it had been directed to increase oil capacity further to 13m bpd by 2027 from 12m bpd today (the Neutral Zone shared with Kuwait adds notionally another 0.5m bpd). But the first small increments will only be ready by 2025. The full gain will be complete by 2027, “after which the kingdom will not have any additional capacity to increase production”, Crown Prince Mohammed bin Salman told the US-Arab summit on Saturday.
So Saudi Arabia faces three obstacles to any major increase in production after September. First, it would have to agree that with its Opec+ partners.
On Friday, Dr Anwar Gargash, UAE Diplomatic Adviser to the President and former minister of state for foreign affairs, said the country wants a more stable oil market.
The UAE is the only other Opec+ country with substantial usable spare capacity, though. Iraq is in political deadlock; Libya’s oil exports curbed by militias; Russia, Venezuela and Iran under sanctions; and the others struggling with underinvestment and mature fields.
Still, Saudi Arabia wants to keep these allies on-board in case of a renewed slump in demand, which would require reactivating production curbs. It can engage in a careful diplomatic process of adjusting quotas to reflect new realities. But it would not wish to act alone or with the support of a single like-minded partner, unless the other Opec+ states are intransigent.
Second, the country needs to beware of its own production ceiling. On current figures, it could add as much as 1.5m bpd, but at the cost of eliminating any safety margin in the world market. Saudi Minister of State for Foreign Affairs Adel Al Jubeir has indicated the kingdom would only produce more oil if there were a supply shortage.
Opec itself effectively predicts such a shortage: it has global demand rising at a scorching pace: 4.4m bpd in the remainder of this year, another 2.7m bpd next year. This looks implausible but, if it did happen, it is not clear how this level of production could be delivered or even refined. So, Riyadh does not unilaterally have the ability to ease the world’s oil troubles.
Third, as it approaches maximum output levels, it has the experience of 2005-8 as a caution. It does not want to expand or accelerate oil capacity hastily, beyond current plans. Such investments might be stranded by an imminent recession, and then made obsolete in the longer term as climate policy and the rise of electric vehicles reduce world demand into the 2030s.
On upside or downside, Saudi Arabia’s tools for influencing the petroleum market are at risk. But for now, protecting the downside is more achievable. It is not clear what in oil the presidential visit hoped to achieve; we may know in September if it yielded anything.
Robin M Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis
RESULTS
Catchweight 63.5kg: Shakriyor Juraev (UZB) beat Bahez Khoshnaw (IRQ). Round 3 TKO (body kick)
Lightweight: Nart Abida (JOR) beat Moussa Salih (MAR). Round 1 by rear naked choke
Catchweight 79kg: Laid Zerhouni (ALG) beat Ahmed Saeb (IRQ). Round 1 TKO (punches)
Catchweight 58kg: Omar Al Hussaini (UAE) beat Mohamed Sahabdeen (SLA) Round 1 rear naked choke
Flyweight: Lina Fayyad (JOR) beat Sophia Haddouche (ALG) Round 2 TKO (ground and pound)
Catchweight 80kg: Badreddine Diani (MAR) beat Sofiane Aïssaoui (ALG) Round 2 TKO
Flyweight: Sabriye Sengul (TUR) beat Mona Ftouhi (TUN). Unanimous decision
Middleweight: Kher Khalifa Eshoushan (LIB) beat Essa Basem (JOR). Round 1 rear naked choke
Heavyweight: Mohamed Jumaa (SUD) beat Hassen Rahat (MAR). Round 1 TKO (ground and pound)
Lightweight: Abdullah Mohammad Ali Musalim (UAE beat Omar Emad (EGY). Round 1 triangle choke
Catchweight 62kg: Ali Taleb (IRQ) beat Mohamed El Mesbahi (MAR). Round 2 KO
Catchweight 88kg: Mohamad Osseili (LEB) beat Samir Zaidi (COM). Unanimous decision
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The Bio
Favourite place in UAE: Al Rams pearling village
What one book should everyone read: Any book written before electricity was invented. When a writer willingly worked under candlelight, you know he/she had a real passion for their craft
Your favourite type of pearl: All of them. No pearl looks the same and each carries its own unique characteristics, like humans
Best time to swim in the sea: When there is enough light to see beneath the surface
Summer special
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
ESSENTIALS
The flights
Etihad (etihad.com) flies from Abu Dhabi to Mykonos, with a flight change to its partner airline Olympic Air in Athens. Return flights cost from Dh4,105 per person, including taxes.
Where to stay
The modern-art-filled Ambassador hotel (myconianambassador.gr) is 15 minutes outside Mykonos Town on a hillside 500 metres from the Platis Gialos Beach, with a bus into town every 30 minutes (a taxi costs €15 [Dh66]). The Nammos and Scorpios beach clubs are a 10- to 20-minute walk (or water-taxi ride) away. All 70 rooms have a large balcony, many with a Jacuzzi, and of the 15 suites, five have a plunge pool. There’s also a private eight-bedroom villa. Double rooms cost from €240 (Dh1,063) including breakfast, out of season, and from €595 (Dh2,636) in July/August.
About Okadoc
Date started: Okadoc, 2018
Founder/CEO: Fodhil Benturquia
Based: Dubai, UAE
Sector: Healthcare
Size: (employees/revenue) 40 staff; undisclosed revenues recording “double-digit” monthly growth
Funding stage: Series B fundraising round to conclude in February
Investors: Undisclosed
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
THE BIO
Ms Al Ameri likes the variety of her job, and the daily environmental challenges she is presented with.
Regular contact with wildlife is the most appealing part of her role at the Environment Agency Abu Dhabi.
She loves to explore new destinations and lives by her motto of being a voice in the world, and not an echo.
She is the youngest of three children, and has a brother and sister.
Her favourite book, Moby Dick by Herman Melville helped inspire her towards a career exploring the natural world.
UAE currency: the story behind the money in your pockets
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
Tailors and retailers miss out on back-to-school rush
Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”
A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.
“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”
How to wear a kandura
Dos
- Wear the right fabric for the right season and occasion
- Always ask for the dress code if you don’t know
- Wear a white kandura, white ghutra / shemagh (headwear) and black shoes for work
- Wear 100 per cent cotton under the kandura as most fabrics are polyester
Don’ts
- Wear hamdania for work, always wear a ghutra and agal
- Buy a kandura only based on how it feels; ask questions about the fabric and understand what you are buying
COMPANY%20PROFILE%20
%3Cp%3E%3Cstrong%3EName%3A%3C%2Fstrong%3E%20Haltia.ai%0D%3Cbr%3E%3Cstrong%3EStarted%3A%3C%2Fstrong%3E%202023%0D%3Cbr%3E%3Cstrong%3ECo-founders%3A%3C%2Fstrong%3E%20Arto%20Bendiken%20and%20Talal%20Thabet%0D%3Cbr%3E%3Cstrong%3EBased%3A%3C%2Fstrong%3E%20Dubai%2C%20UAE%0D%3Cbr%3E%3Cstrong%3EIndustry%3A%3C%2Fstrong%3E%20AI%0D%3Cbr%3E%3Cstrong%3ENumber%20of%20employees%3A%3C%2Fstrong%3E%2041%0D%3Cbr%3E%3Cstrong%3EFunding%3A%3C%2Fstrong%3E%20About%20%241.7%20million%0D%3Cbr%3E%3Cstrong%3EInvestors%3A%3C%2Fstrong%3E%20Self%2C%20family%20and%20friends%26nbsp%3B%3C%2Fp%3E%0A
COMPANY%20PROFILE
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Directed by: Craig Gillespie
Starring: Emma Stone, Emma Thompson, Joel Fry
4/5
Places to go for free coffee
- Cherish Cafe Dubai, Dubai Investment Park, are giving away free coffees all day.
- La Terrace, Four Points by Sheraton Bur Dubai, are serving their first 50 guests one coffee and four bite-sized cakes
- Wild & The Moon will be giving away a free espresso with every purchase on International Coffee Day
- Orange Wheels welcome parents are to sit, relax and enjoy goodies at ‘Café O’ along with a free coffee
Profile Idealz
Company: Idealz
Founded: January 2018
Based: Dubai
Sector: E-commerce
Size: (employees): 22
Investors: Co-founders and Venture Partners (9 per cent)
Directed: Smeep Kang
Produced: Soham Rockstar Entertainment; SKE Production
Cast: Rishi Kapoor, Jimmy Sheirgill, Sunny Singh, Omkar Kapoor, Rajesh Sharma
Rating: Two out of five stars
EPL's youngest
- Ethan Nwaneri (Arsenal)
15 years, 181 days old
- Max Dowman (Arsenal)
15 years, 235 days old
- Jeremy Monga (Leicester)
15 years, 271 days old
- Harvey Elliott (Fulham)
16 years, 30 days old
- Matthew Briggs (Fulham)
16 years, 68 days old
MATCH INFO
Day 2 at the Gabba
Australia 312-1
Warner 151 not out, Burns 97, Labuschagne 55 not out
Pakistan 240
Shafiq 76, Starc 4-52
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
MATCH INFO
Champions League quarter-final, first leg
Tottenham Hotspur v Manchester City, Tuesday, 11pm (UAE)
Matches can be watched on BeIN Sports
Results
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