Saudi Arabia does not rule out boosting its crude production by up to 2 million barrels per day (bpd), pushing the country to maximum capacity, as the world’s biggest oil exporter seeks to assure markets of its ability to ramp up output quickly to meet demand or cope with supply disruptions.
“I think we are in a good place today in terms of supply-demand balance and inventories,” Khalid Al Falih, the kingdom's oil minister told delegates at the opening of the three-day Future Investment Initiative conference taking place in Riyadh on Tuesday.
“I would not rule out the kingdom’s production, which has been 9 million to 10 million bpd over the last decade or so, would be 1 million or 2 million [bpd] higher.”
Saudi-led Opec and Russian-led members of a global oil pact are increasing production, reversing a deal that was implemented in January 2017 to curb output by 1.8 million bpd in a bid to prop up prices and balance the market. Oil prices have jumped over 40 per cent since January last year thanks to the global oil cuts and more recently concern about dwindling production from major oil producers, including Iran.
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Saudi Arabia has no intention of repeating 1973 oil embargo, minister says
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Opec, which is slated to meet in December, is seeking to extend the global oil pact and attract more countries to help stabilise the market, said Mr Al Falih.
“Procedurally, what we are hoping to do in December is to ink an agreement amongst at least 25 countries that are signatories to the current agreement and hopefully more countries will join,” said Mr Al Falih.
Saudi Arabia, which is currently producing below its maximum oil production capacity of 12 million bpd, has assured markets it can ramp up its output to fill supply gaps in the market, which is being tested by disruptions in key Opec producers Venezuela and Iran. Tehran is forecast to suffer from further declines in oil production and exports as the November 4 deadline for the US re-imposition of sanctions on its energy industry looms.
Mr Al Falih said there is a global need to invest in spare oil capacity to meet market demand in case of disruptions to supply.
“What we need to decide, depending on the global landscape of how energy is managed, to invest in the significant spare capacity of 2 million [bpd],” said Mr Al Falih
Saudi Aramco, the world’s biggest oil producing company, can boost production to 12 million bpd within three months if it is needed, its chief executive Amin Nasser told the conference on Tuesday.
“We have to continue to monitor the market in the next two to three months and in January and beyond we will decide if there are disruptions from supplies, especially with the Iran sanctions looming,” said Mr Al Falih. “Then we will continue with the mindset we have, which is to meet any demand that materialises and making sure that customers are satisfied.”
If the Opec+, as members in the global oil pact are called, see that oil inventories are beginning to rise again, they will intervene to bring back stability to the market, the oil minister said. Opec aims to bring down inventories to their five-year average to avert a repeat of the oil-price crash in mid- 2014 from $115 a barrel to less than $30 a barrel in the first quarter of 2016.
“If, supplies start increasing and inventories continue to build to where we get worried about repeating the 2014 scenario then we will have the mechanism in place to reconvene and quickly re-arrange production and bring supply-demand balance and prevent inventories from growing,” Mr Al Falih said.
“It is a very unpredictable situation from supply in particular but demand also has its uncertainties with trade friction and with developing countries currency issues," he said. "We are watching constantly and what I can assure is that producing countries are pretty much aligned with what we have done for the last few years.”
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Aayan%E2%80%99s%20records
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
ALRAWABI%20SCHOOL%20FOR%20GIRLS
%3Cp%3ECreator%3A%20Tima%20Shomali%3C%2Fp%3E%0A%3Cp%3EStarring%3A%C2%A0Tara%20Abboud%2C%C2%A0Kira%20Yaghnam%2C%20Tara%20Atalla%3C%2Fp%3E%0A%3Cp%3ERating%3A%204%2F5%3C%2Fp%3E%0A
MATCH INFO
Fixture: Ukraine v Portugal, Monday, 10.45pm (UAE)
TV: BeIN Sports
Sunday's fixtures
- Bournemouth v Southampton, 5.30pm
- Manchester City v West Ham United, 8pm
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
MATCH INFO
Who: UAE v USA
What: first T20 international
When: Friday, 2pm
Where: ICC Academy in Dubai
