In Thucydides’ famous words, “the strong do what they can and the weak suffer what they must”.
Although in theory a mutual organisation, Opec behaves in the same way. Sunday’s monitoring committee meeting in Algiers confirmed this.
The Joint Ministerial Monitoring Committee (JMMC), an ad hoc body created to oversee the December 2016 “Vienna Group” deal, contains Saudi Arabia, Kuwait, Venezuela, Algeria and the two non-Opec contributors, Oman and Russia. This gives Saudi Arabia, supported by two other GCC members, and Russia the decisive voice. Venezuela, with production plunging and partly beholden to Russian loans, is too weak to do more than protest.
The JMMC does not have decision-making powers; it just reports on compliance and the effect on the market. By June’s Opec meeting, compliance was well above 100 per cent, in comparison to previous Opec arrangements where even “successful” production cuts achieved some 70-80 per cent adherence. Consequently, the group decided to raise production back into line with its desired level.
Iran said it understood June’s outcome to mean that countries that were producing below their target would boost output if they could. But the other key members interpreted the communique to mean they could increase production as long as the Vienna Group as a whole remained below its target - and behaved accordingly. They have consequently taken market share from Iran, where US sanctions have already cut crude and condensate exports from 2.3 million barrels per day (bpd) in July to 1.69 million bpd in the first half of this month, even before the restrictions come fully into force in November.
Iran’s oil minister, Bijan Zanganeh, has pledged to veto any Opec decision against his country’s interests. The organisation operates on a principle of unanimity. But Iran has no power to compel any other member.
Power in Opec rests on three pillars: spare capacity - the ability to put more oil on the market at short notice; the fiscal wherewithal to cut output when the market is in surplus; and the long-term ability to expand output to gain market share and deter competitors.
Saudi Arabia possesses all three capabilities, as does the UAE, though a smaller player. Riyadh is conducting major offshore field expansions currently, though in principle these are only to replace natural declines onshore, and it boosted production by almost half a million barrels per day since May. It has the vast bulk of the world’s spare capacity, some 2 million bpd at current output levels.
_______________
Read more:
Global oil production set to top 100 million bpd in weeks
Russian oil output hits new post-Soviet era record
Adnoc achieves full production of polymer-grade propylene
_______________
Abu Dhabi, meanwhile, is pushing towards its target of 3.5 million bpd capacity, and the UAE as a whole produced about 2.97 million bpd in August.
Kuwait too has all three abilities in principle, though domestic politics constrain production expansion. But its new light oil output from deep Jurassic reservoirs has hit a not inconsiderable 175,000 bpd.
Russia’s cooperation with Opec shows that, when called upon, it can trim production a little, but its partly privatised industry pushes back against deep cuts. It boosted its output to a post-Soviet record of 11.29-11.36 million bpd this month, following the decision to abandon individual country targets. With plans for another 300,000 bpd of medium-term growth, it could move beyond the peak of 11.4 million bpd it produced in 1987 when still part of the USSR. Long-term, production will continue to creep up, though at higher costs and lower government revenues as it moves into the Arctic and east Siberia, and extends tax breaks for mature and difficult fields.
Iraq is too fiscally weak to cut production much, and it was the weakest Opec adherer to the promised cuts. It has substantial spare production capacity, but some 200,000 bpd of this lies around Kirkuk, which is hostage to a deal with the autonomous Kurdistan region allowing exports via Turkey to resume.
However, Iraq has the best potential for capacity growth of any Opec member. It could reach almost 5 million bpd production by the end of this year, and perhaps more than 6 million bpd by the early 2020s. It needs to fix its creaky export infrastructure in the south, form a new government and deal at least superficially with the deprivation that has triggered widespread protests around Basra.
Libya and Nigeria are wildcards - production is vulnerable to security breakdowns, though both could expand output significantly in the longer term given more favourable domestic politics. The other Opec members, including newbies Congo and Equatorial Guinea, can be disregarded - they are relatively small and mostly struggling to sustain current production, let alone yielding major gains.
In comparison, Iran lacks the basics of Opec power. It is involuntarily cutting exports because of sanctions, but would not do so deliberately. It cannot raise production much, even if it could find buyers. And long-term capacity expansion has repeatedly been stymied by bureaucracy, tough contract terms and deterrence of investors by the shadow of US hostility.
Iran had a window between the adoption of the Joint Comprehensive Plan of Action in January 2016, and the US withdrawal in May this year, but it signed only one major field development project with an international investor, and that was for gas.
But, of course, power within Opec and the oil market is not the only kind of power, particularly for a large country like Iran. Its response to its competitors and to sanctions will play out on the bigger fields of economics, security and geopolitics, as it seeks to avoid the fate of the weak.
Robin M. Mills is CEO of Qamar Energy, and author of The Myth of the Oil Crisis
The specs
Engine: 0.8-litre four cylinder
Power: 70bhp
Torque: 66Nm
Transmission: four-speed manual
Price: $1,075 new in 1967, now valued at $40,000
On sale: Models from 1966 to 1970
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The specs: 2018 Nissan 370Z Nismo
The specs: 2018 Nissan 370Z Nismo
Price, base / as tested: Dh182,178
Engine: 3.7-litre V6
Power: 350hp @ 7,400rpm
Torque: 374Nm @ 5,200rpm
Transmission: Seven-speed automatic
Fuel consumption, combined: 10.5L / 100km
MATCH INFO
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Namibia beat Oman by 52 runs
UAE beat Namibia by eight wickets
UAE v Oman - abandoned
Oman v Namibia - abandoned
If you go...
Etihad flies daily from Abu Dhabi to Zurich, with fares starting from Dh2,807 return. Frequent high speed trains between Zurich and Vienna make stops at St. Anton.
FIXTURES
Monday, January 28
Iran v Japan, Hazza bin Zayed Stadium (6pm)
Tuesday, January 29
UAEv Qatar, Mohamed Bin Zayed Stadium (6pm)
Friday, February 1
Final, Zayed Sports City Stadium (6pm)
Race card
6.30pm: Maiden (TB) Dh 82,500 (Dirt) 1.600m
7.05pm: Maiden (TB) Dh 82,500 (D) 2,000m
7.50pm: Handicap (TB) Dh 82,500 (D) 1,600m
8.15pm: The Garhoud Sprint Listed (TB) Dh 132,500 (D) 1,200m
8.50pm: The Entisar Listed (TB) Dh 132,500 (D) 2,000m
9.25pm: Conditions (TB) Dh 120,000 (D) 1,400m
The biog
Family: He is the youngest of five brothers, of whom two are dentists.
Celebrities he worked on: Fabio Canavaro, Lojain Omran, RedOne, Saber Al Rabai.
Where he works: Liberty Dental Clinic
Race results:
1. Thani Al Qemzi (UAE) Team Abu Dhabi: 46.44 min
2. Peter Morin (FRA) CTIC F1 Shenzhen China Team: 0.91sec
3. Sami Selio (FIN) Mad-Croc Baba Racing Team: 31.43sec
What is Folia?
Prince Khaled bin Alwaleed bin Talal's new plant-based menu will launch at Four Seasons hotels in Dubai this November. A desire to cater to people looking for clean, healthy meals beyond green salad is what inspired Prince Khaled and American celebrity chef Matthew Kenney to create Folia. The word means "from the leaves" in Latin, and the exclusive menu offers fine plant-based cuisine across Four Seasons properties in Los Angeles, Bahrain and, soon, Dubai.
Kenney specialises in vegan cuisine and is the founder of Plant Food Wine and 20 other restaurants worldwide. "I’ve always appreciated Matthew’s work," says the Saudi royal. "He has a singular culinary talent and his approach to plant-based dining is prescient and unrivalled. I was a fan of his long before we established our professional relationship."
Folia first launched at The Four Seasons Hotel Los Angeles at Beverly Hills in July 2018. It is available at the poolside Cabana Restaurant and for in-room dining across the property, as well as in its private event space. The food is vibrant and colourful, full of fresh dishes such as the hearts of palm ceviche with California fruit, vegetables and edible flowers; green hearb tacos filled with roasted squash and king oyster barbacoa; and a savoury coconut cream pie with macadamia crust.
In March 2019, the Folia menu reached Gulf shores, as it was introduced at the Four Seasons Hotel Bahrain Bay, where it is served at the Bay View Lounge. Next, on Tuesday, November 1 – also known as World Vegan Day – it will come to the UAE, to the Four Seasons Resort Dubai at Jumeirah Beach and the Four Seasons DIFC, both properties Prince Khaled has spent "considerable time at and love".
There are also plans to take Folia to several more locations throughout the Middle East and Europe.
While health-conscious diners will be attracted to the concept, Prince Khaled is careful to stress Folia is "not meant for a specific subset of customers. It is meant for everyone who wants a culinary experience without the negative impact that eating out so often comes with."
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
Tour de France
When: July 7-29
UAE Team Emirates:
Dan Martin, Alexander Kristoff, Darwin Atapuma, Marco Marcato, Kristijan Durasek, Oliviero Troia, Roberto Ferrari and Rory Sutherland
MATCH INFO
What: India v Afghanistan, first Test
When: Starts Thursday
Where: M Chinnaswamy Stadium, Bengalaru
TEST SQUADS
Bangladesh: Mushfiqur Rahim (captain), Tamim Iqbal, Soumya Sarkar, Imrul Kayes, Liton Das, Shakib Al Hasan, Mominul Haque, Nasir Hossain, Sabbir Rahman, Mehedi Hasan, Shafiul Islam, Taijul Islam, Mustafizur Rahman and Taskin Ahmed.
Australia: Steve Smith (captain), David Warner, Ashton Agar, Hilton Cartwright, Pat Cummins, Peter Handscomb, Matthew Wade, Josh Hazlewood, Usman Khawaja, Nathan Lyon, Glenn Maxwell, Matt Renshaw, Mitchell Swepson and Jackson Bird.
COMPANY PROFILE
Name: Rain Management
Year started: 2017
Based: Bahrain
Employees: 100-120
Amount raised: $2.5m from BitMex Ventures and Blockwater. Another $6m raised from MEVP, Coinbase, Vision Ventures, CMT, Jimco and DIFC Fintech Fund
Top tips
Create and maintain a strong bond between yourself and your child, through sensitivity, responsiveness, touch, talk and play. “The bond you have with your kids is the blueprint for the relationships they will have later on in life,” says Dr Sarah Rasmi, a psychologist.
Set a good example. Practise what you preach, so if you want to raise kind children, they need to see you being kind and hear you explaining to them what kindness is. So, “narrate your behaviour”.
Praise the positive rather than focusing on the negative. Catch them when they’re being good and acknowledge it.
Show empathy towards your child’s needs as well as your own. Take care of yourself so that you can be calm, loving and respectful, rather than angry and frustrated.
Be open to communication, goal-setting and problem-solving, says Dr Thoraiya Kanafani. “It is important to recognise that there is a fine line between positive parenting and becoming parents who overanalyse their children and provide more emotional context than what is in the child’s emotional development to understand.”
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
