Saudis change oil minister but keep failed market share policy

Bloomberg/Fuel Fix:
Saudi Arabian Oil Minister Ali al-Naimi, the architect of the 2014 switch in OPEC policy that’s since has roiled the energy market, companies and entire economies from Mexico to Nigeria, is leaving his post.

An 80-year-old who rose from modest Bedouin roots, al-Naimi headed the ministry for almost 21 years, steering the world’s largest crude exporter through wild price swings, regional wars, technological progress and the rise of climate change as a key policy concern.

“During my seven decades in the industry, I’ve seen oil at under $2 a barrel and $147, and much volatility in between,” al-Naimi told a gathering of the who’s who of the American oil industry in February in Houston. “ I’ve witnessed gluts and scarcity. I’ve seen multiple booms and busts.”

The departure of al-Naimi, who for years could move markets just uttering a few words, is the latest sign of how the country’s young Deputy Crown Prince Mohammed bin Salman is stamping his authority over oil policy. Khalid Al-Falih, chairman of Saudi Arabian Oil Co., the state-owned producer, will replace him as minister of energy, industry and mineral resources. Al-Falih is known to be close to the king and to Prince Mohammed.

“Khalid has been integral to the current oil policy of Saudi Arabia and has worked very closely with the deputy crown prince,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University in New York and a former White House oil official.

Saudi oil policy is unlikely to change with al-Falih. If anything, Prince Mohammed has insisted that Saudi Arabia will continue to defend its market share and won’t agree to any oil output freeze to curb the global glut without the participation of other major producers.

“We don’t care about oil prices,” Prince Mohammed told Bloomberg in an interview in April. “$30 or $70, they are all the same to us. We have our own programs that don’t need high oil prices.”
...
This policy is turning OPEC into a suicide pact, with weaker members on the verge of collapse.  Meanwhile, their original target, US shale producers,  are becoming more efficient and able to compete on price.  The Saudis and OPEC have lost the ability to manipulate prices.

Comments

Post a Comment

Popular posts from this blog

Should Republicans go ahead and add Supreme Court Justices to head off Democrats

Washington Post: Some Democrats eye adding more justices to the Supreme Court to change its ideological bent The once-remote idea has gained the attention of liberals angered by the GOP push to remake the federal courts. Probably the easy way to defeat this court-packing scheme is for Trump to propose doing the same thing now.  It would lead to Democrat denunciations and claims that it would be wrong, thereby blowing up any attempt by them in the unfortunate event of Democrats winning a presidential election.
Read more

29 % of companies say they are unlikely to keep insurance after Obamacare

Conn Carroll: A new survey of 368 midsize to large companies found that 29% of them are considering terminating their active employee health care plans when Obamacare is full implemented in 2014. Only 71% of employers surveyed said they did not expect to drop their health coverage, while 20% said they did not know and 9% said they were planning to exit. The latest survey, conducted by Towers Watson, echoes an ealier survey by McKinsey & Co. finding that 30% of private-sector employers were planning to drop their employee health insurance coverage by 2014. When the Congressional Budget Office crunched Obamacare's spending numbers, they estimated that only 7% of employees currently covered by employer-sponsored plans would lose their plans. ... This means the cost of the health care fiasco will be hundreds of billions more than estimated by the CBO and Congressional Democrat. It is also clear that Obama's pledge that you could keep your health care plan if you wanted t
Read more

Bin Laden's concern about Zarqawi's remains

James Robbins: ... Bin Laden suggests that President Bush should allow Zarqawi’s body to be returned to his family in Jordan, but this is a matter that is up to the Jordanian government, which so far has not shown much interest in facilitating a homecoming. Bin Laden mocks King Abdullah II, calling him a Coalition minion, and asking “w hat scares you about Abu Musab after he’s dead? You know that his funeral, if allowed to happen, would be a huge funeral showing the extent of sympathy with the mujahedin.” A large crowd would definitely turn out, though most people would be on hand to demonstrate their anger and disgust. Last November’s hotel bombings in Amman , masterminded by Zarqawi, are still fresh in people’s memory, and mentioning them to Jordanians has the same visceral impact as memory of the 9/11 attacks does here. Jordan has adopted a zero-tolerance policy towards those who choose to mourn the country’s least favorite son, and four opposition members of parliament who paid con
Read more