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Saudi oil policy risks creating perfect storm for Aramco flotation

15 April 2018

Good business strategies generally create good investments over the longer term. And so Aramco needs to ensure it has the best possible strategies, if it wants to maximise the outcome from its planned $2tn flotation. Unfortunately, the current oil price strategy seems more likely to damage its valuation, by being based on 3 questionable assumptions: Oil […]

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Saudi Arabia’s ‘Vision 2030’ is looking a lot less clear

30 October 2017

Saudi Arabia’s U-turn to revive oil output quotas is not working and fails to address the changing future of oil demand, as I describe in my latest post for the Financial Times, published on the BeyondBrics blog Saudi Arabia’s move into recession comes at an unfortunate time for its new Crown Prince, Mohammed bin Salman […]

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Speculators’ tail wags oil market dog as paper trading dominates

2 February 2017

Trading oil markets used to be hard work. You had to talk to all the major players all the time (not just message them), and learn to judge whether they were telling the truth or inventing a version of it.  You had to watch for breaking economic and political news.  And you needed your own […]

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Naimi finally allowed to retire, Saudi oil policy stays the same

8 May 2016

81-year olds are allowed to retire, even if they have to wait a year for final permission to be given.  But it seems a simple headline saying “Saudi Oil Minister retires after 69 year career” is not “exciting” enough in today’s media world?  So perhaps we can’t be too surprised to find some of the world’s […]

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Saudi plans to transform Aramco to energy /industrial company

27 April 2016

“Within 20 years, we will be an economy that doesn’t depend mainly on oil“. With that one statement, deputy Crown Prince Mohammed bin Salman (pictured above), changed the outlook for oil and energy markets.  The world’s major oil producer, with the lowest cost, was signalling that the kingdom will no longer be supply-driven, focused on […]

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OPEC faces New Normal dilemma as oil demand slows

16 October 2014

Yesterday’s post described how OPEC oil producers are seeing their export sales to the US start to disappear.  But this, of course, is only one side of the story.  As the chart from the Wall Street Journal shows, Saudi needs a $93/bbl oil price to balance its budget.  Most of OPEC needs a higher price.  Only Kuwait, UAE and Qatar need […]