LONDON: Saudi Arabia and Russia have signed a roadmap deal to implement a civil nuclear cooperation program that was inked in Moscow in October when King Salman met President Vladimir Putin.
A statement from Russian state-owned nuclear company Rosatom said on Thursday the countries aim to cooperate in the field of small and medium-sized nuclear reactors that can be used for both power generation and water desalination.
“The parties also plan to cooperate in training personnel for the Saudi nuclear industry and developing the Kingdom’s nuclear infrastructure,” Rosatom said.
Additionally, Russia and Saudi Arabia would look to establish a center for nuclear science and technology in KSA, one based on a Russian-design research reactor, said Rosatom in an announcement on its website.
Evgeny Pakermanov — president of Rusatom Overseas, a subsidiary of Rosatom responsible for promoting Russian nuclear technologies in overseas markets — and Maher Abdullah Alodan, chief atomic energy officer of the King Abdullah City for Atomic and Renewable Energy (K.A.CARE), signed the document on behalf of Russia and Saudi Arabia respectively.
Jane Kinninmont, a senior research fellow specializing in the Middle East at London-based Chatham House, told Arab News: “As the Saudi king’s unprecedented visit to Moscow in October indicated, these days most players prefer to hedge their bets, balancing different relationships and avoiding over-aligning with any single power.”
The nuclear roadmap comprises a set of steps to be implemented by the parties in order to promote cooperation in areas designated in the accord, signed into effect in Moscow on Oct. 5, 2017.
The historic summit in the Russian capital indicated a thawing of relations between the two countries, which are on different sides in the Syrian civil war — but which, nevertheless, have a common interest in maintaining a stable oil price and have other joint commercial and geopolitical interests.
At the time of that meeting, Russian Energy Minister Alexander Novak said: “We (and Saudi Arabia) have a vast potential for developing cooperation in nuclear power. Nuclear power may become one of the basic sources and an extra catalyst for the development of various industries and innovation technologies in Saudi Arabia.”
Nabi Abdullaev, associate director at Control Risks in London, told Arab News: “With trade between Russia and Iran being below $2 billion (compared to $40 billion with Turkey), Russia is interested in balancing Tehran politically and in exploring economic opportunities with Saudi Arabia.”
Saudi Arabia, Russia cement nuclear energy ties
Saudi Arabia, Russia cement nuclear energy ties
US guarantees for Gulf maritime trade ‘doable’ but could take weeks, experts warn
RIYADH: A pledge by US President Donald Trump to provide insurance and naval escorts for maritime trade in the Gulf has been welcomed, but with concerns over how long it would take to come into force.
In a social media post on March 3, the president said the offer will be available to all shipping lines, and added that “if necessary” the US Navy would escort tankers through the Strait of Hormuz.
The announcement comes as commercial marine insurers and shipping operators reassess risk in and around the Gulf in light of the US-Israel war with Iran.
War-risk premiums have surged, and London’s Joint War Committee has expanded the area it treats as high risk, a move that can increase insurance costs and complicate coverage for voyages in the region.
Joshua Tallis, a senior research scientist at the Center for Naval Analyzes, said it was “unlikely” the US Navy would be able to defend commercial vessels “over the next seven to 10 days,” according to the Financial Times. Escort missions would probably begin only after “the initial phase of major hostilities,” he added, once a larger portion of Iran’s anti-ship capabilities had been degraded.
Mark Montgomery, a retired US Navy rear admiral and former aircraft carrier strike group commander, said such an operation would be “hard but doable,” but warned it could take up to two weeks before conditions were suitable for escorts.
He also said diverting naval assets to convoy protection would likely “cause a reduction in the amount of strike[s] the US could carry out,” the Financial Times reported.
Multiple marine insurers have moved to cancel war-risk cover for vessels operating in Iranian and surrounding Gulf waters, underscoring how difficult it has become for shipowners to obtain protection at any price.
It remains unclear whether the DFC can quickly and credibly fill the gap. The agency’s political risk insurance is typically tied to specific investments and projects and covers threats such as war and terrorism.
Expanding that capacity into broad, transit-linked maritime coverage for “all shipping lines” would be a significant operational and policy stretch, and market participants told Reuters they were skeptical that insurance and escorts alone would be enough to restore flows while fighting continues.
Tobias Maier, CEO of DHL Global Forwarding Middle East and Africa, said some shipping lines have already begun diverting cargo away from the Strait of Hormuz as security risks rise.
“Due to safety concerns, several international carriers have halted their operations in the Strait of Hormuz and are diverting their ships away from the Gulf,” Maier said in comments to Arab News.
He added that the logistics company has activated contingency plans to maintain supply chains in the region, including shifting cargo flows through alternative routes.
“We have activated contingency and mitigation plans, including alternative routing and multimodal solutions — at this stage focusing on Oman and Saudi Arabia as gateways into and out of the GCC,” Maier said, adding that “the safety of our employees and our customers’ cargo as well as maintaining supply chain continuity where possible are of the utmost importance to us.”
Even if implemented, Trump’s measure is more likely to reduce the cost of risk than remove the risk itself.
Analysts and shipping sources cited by Reuters said naval escorts would take time to organize and that US naval resources in the region are not unlimited; insurers and shipowners also have to weigh missile, drone and mine threats that can persist despite convoying.
The net effect, industry participants said, could be a partial easing of war-risk pricing for some voyages, rather than an immediate normalization of traffic through Hormuz.
Energy markets did not appear to stabilize immediately after Trump’s announcement.
Brent crude settled up sharply on March 3, and prices rose again on March 4 as traders focused on the scale of disruptions and ongoing attacks rather than prospective policy support; Brent was reported around the low-to-mid $80s a barrel and WTI in the mid-to-high $70s.
Goldman Sachs, in a March 4 note reported by Reuters, raised its near-term oil-price forecasts and warned that a prolonged disruption of flows through Hormuz could push Brent toward $100 under some scenarios.
The biggest constraint, traders and shipping executives say, is physical movement: if tankers refuse to sail or cannot obtain insurance or safe passage, insurance guarantees alone may not restart volumes.
Insurance withdrawals and cancelations, as well as sharply higher freight rates, have already disrupted ship scheduling and pushed costs to move crude and liquefied natural gas higher, amplifying the inflationary impact of the conflict for importing countries.
Moody’s said the immediate credit impact of the Iran conflict on insurers in the Gulf Cooperation Council region is likely to be limited if disruptions remain short-lived, with its baseline scenario assuming the conflict lasts only weeks and that navigation through the Strait of Hormuz eventually resumes at scale.
Under that scenario, insurers would not face immediate pressure on their credit profiles. The ratings agency said the primary transmission channel would come through insurers’ investment portfolios rather than underwriting losses, as disruptions to oil exports and tourism could weigh on regional asset prices, particularly real estate and equities.
Moody’s estimates that a 20 percent decline in those asset valuations would reduce the total equity of rated insurers by around 7 percent, a hit that most larger companies could absorb due to existing capital buffers. However, risks would rise if the conflict drags on, potentially weakening premium growth, increasing competitive pricing pressure and eroding capital cushions across the sector.
