OPEC is not the enemy of the US: UAE energy minister

UAE Energy Minister Suhail Al-Mazrouei said the average oil price of $70 a barrel in 2019 was backed by a pact between OPEC and non-OPEC oil exporters to cut output. (Reuters)
Updated 13 January 2019
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OPEC is not the enemy of the US: UAE energy minister

  • UAE Energy MInister Suhail Al-Mazrouei expects an average oil price of $70 a barrel in 2019
  • Price is based on an agreement to cut output by OPEC and non-OPEC oil exporters reached last month

ABU DHABI: The Organization of Petroleum Exporting Countries is not the enemy of the US, UAE Minister Suhail Al-Mazrouei said on Saturday in Abu Dhabi.

“We are complementing each other, we are not enemies here,” Al-Mazrouei told an industry conference in Abu Dhabi, addressing the relationship between OPEC and major consuming countries like the US.

OPEC, and other leading global oil producers led by Russia, agreed in December to cut their combined oil output by 1.2 million barrels per day from January in order to balance the oil market.

The decision came despite US. President Donald Trump’s calls to oil exporters to refrain from cutting production, saying it would trigger higher oil prices worldwide.

Al-Mazrouei said the average oil price in 2018 was $70 a barrel. His Omani counterpart Mohammed Al-Rumhi, addressing the same event, said he expected a price of between $60 and $80 a barrel in 2019.

The 1.2 million bpd cut should be enough to balance the market, Al-Mazrouei said, expecting the correction to start this month and to be achieved in the first half of the year.

He said there was no need for major oil exporters to hold an extraordinary meeting before the one planned in April.

“Things are working well,” said Oman’s Rumhi, whose country is taking part in the supply reduction agreement without being a member of OPEC. He also said there was no need for major exporters to meet before April.


Gulf defense spending ‘to top $110bn by 2023’

Updated 15 February 2019
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Gulf defense spending ‘to top $110bn by 2023’

  • Saudi Arabia and UAE initiatives ‘driving forward industrial defense capabilities’
  • Budgets are increasing as countries pursue modernization of equipment and expansion of their current capabilities

LONDON: Defense spending by Gulf Arab states is expected to rise to more than $110 billion by 2023, driven partly by localized military initiatives by Saudi Arabia and the UAE, a report has found.

Budgets are increasing as countries pursue the modernization of equipment and expansion of their current capabilities, according to a report by analytics firm Jane’s by IHS Markit.

Military expenditure in the Gulf will increase from $82.33 billion in 2013 to an estimated $103.01 billion in 2019, and is forecast to continue trending upward to $110.86 billion in 2023.

“Falling energy revenues between 2014 and 2016 led to some major procurement projects being delayed as governments reigned in budget deficits,” said Charles Forrester, senior defense industry analyst at Jane’s.

“However, defense was generally protected from the worst of the spending cuts due to regional security concerns and budgets are now growing again.”

Major deals in the region have included Eurofighter Typhoon purchases by countries including Saudi Arabia and Kuwait.

Saudi Arabia is also looking to “localize” 50 percent of total government military spending in the Kingdom by 2030, and in 2017 announced the launch of the state-owned military industrial company Saudi Arabia Military Industries.

Forrester said such moves will boost the ability for Gulf countries to start exporting, rather than purely importing defense equipment.

“Within the defense sector, the establishment of Saudi Arabia Military Industries (SAMI) in 2017 and consolidation of the UAE’s defense industrial base through the creation of Emirates Defense Industries Company (EDIC) in 2014 have helped consolidate and drive forward industrial defense capabilities,” he said.

“This has happened as the countries focus on improving the quality of the defense technological work packages they undertake through offset, as well as increasing their ability to begin exporting defense equipment.”

Regional countries are also considering the use of “disruptive technologies” such as artificial intelligence in defense, Forrester said.

Meanwhile, it emerged on Friday that worldwide outlays on weapons and defense rose 1.8 percent to more than $1.67 trillion in 2018.

The US was responsible for almost half that increase, according to “The Military Balance” report released at the Munich Security Conference and quoted by Reuters.

Western powers were concerned about Russia’s upgrades of air bases and air defense systems in Crimea, the report said, but added that “China perhaps represents even more of a challenge, as it introduces yet more advanced military systems and is engaged in a strategy to improve its forces’ ability to operate at distance from the homeland.”