NEW YORK: The potential deal between the Organization of the Petroleum Exporting Countries (OPEC) and Russia — announced by Crown Prince Mohammed bin Salman — is a game-changer in the global energy industry.
But it faces hurdles before it can be implemented and maintained according to the ambitious schedule outlined in New York.
Daniel Yergin, an energy expert and author of the Pulitzer Prize-winning history of oil “The Prize,” told Arab News that the possible deal “represents a realignment that reflects the new realities of oil and international relations.”
The crown prince said that the Kingdom and Russia were in talks to extend an agreement on output — sealed in Vienna in late 2016 on a temporary basis — to a longer-term pact of 10 to 20 years.
“We are working to shift from year-to-year agreement to a 10 to 20-year agreement. We have agreement on the big picture, but not yet on the detail,” the crown prince said.
If the deal goes through, it will put in place a new force in the global oil industry, with two of the top three producers, Saudi Arabia and Russia, acting in unison. With around 40 percent of the world’s output between the two producers and the rest of OPEC, the alliance would be a dominant force in the energy industry, able to control supply and — crucially — the price of oil for the next two decades.
But it is by no means a done deal. Ellen Wald, an expert on Saudi energy and author of the forthcoming book “Saudi Inc. The Arabian Kingdom’s Pursuit of Profit and Power,” said: “It would be impossible to extend the current production deal for 10 to 20 years because nobody knows what market conditions will be in the future.”
“What they must be referring to is a discussion on making Russia what amounts to a de facto OPEC member for a certain number of years,” she added.
But there are economic, financial and geopolitical challenges ahead before such a deal — likely to form the centerpiece of negotiations at the next OPEC meeting in Vienna in June — can be clinched.
The current arrangement — dubbed the “Vienna Alliance” by oil experts — has been credited with getting the price of crude back from the doldrums of 2014 and 2015. From a high of more than $100 a barrel after the global financial crisis, the price of a barrel of crude fell below $30 in early 2016.
The agreement on output helped stabilize that price last year, with a sustained recovery coming in the second half of the year as it looked as though the deal was going to hold longer than a few months. Brent crude was trading in New York yesterday close to the $70 a barrel level seen as the “Goldilocks” level — not too cheap and not too expensive — to balance the demands of global producers and consumers.
But the problem is that OPEC is not a cartel that can arbitrarily set the price of oil. It is an organization that has to serve the interests of its members, and the 14 nations — possibly increasing with the inclusion of Russia and other independent producers — that comprise OPEC are subject to the imperatives of their own domestic economic needs as well as the global market.
It has been an achievement — largely credited to Saudi Arabia’s Energy Minister Khalid Al-Falih — to get OPEC and Russian to coordinate supplies over the past 12 months. Maintaining that delicate relationship over decades would be much more difficult.
With global consumption just below 10 million barrels a day, it would only require one member to “go rogue” with a production surge to upset the delicate balance and cause another price collapse.
But perhaps the most serious barrier to any long-term deal is the fact that the global oil market is no longer a two-horse race. American shale producers have turned the international energy market on its head through sophisticated technology that has wrung oil from fields long regarded as impossible to exploit commercially.
The US is now the second largest oil producer, and with the shale industry in full boom, looks certain to overtake Russia and the world’s biggest sometime soon.
This is where the geopolitical challenge emerges. One American energy financier at the Saudi-US CEO Forum in New York explained: “It might be good for Saudi Arabia and the oil price, but it is a strategic play that might not go down well with American producers. It would add a long-term geopolitical element to the oil market that maybe we would not welcome.”
He also pointed to the difficulties of maintaining such a long-term relationship between OPEC and Russia. “There are so many variables. It is not just Saudi Arabia, but all the members of OPEC, which is a mixed bag. Is it in the interests of Venezuela or Iraq to go along with such a deal? And you cannot easily predict how Russia will be thinking in 10 weeks from now, let alone 10 years.”
Yergin said: “We’ve been calling this OPEC and non-OPEC agreement the ‘Vienna Alliance’. Now it looks like an effort to turn it into a lasting alliance.”
Challenges ahead as KSA looks to long-term OPEC-Russia oil deal
Challenges ahead as KSA looks to long-term OPEC-Russia oil deal
Makkah Route Initiative streamlines pilgrimage journey using AI
- Services include the issuing of electronic Hajj visas, biometric data collection, completion of passport procedures
RIYADH: The Makkah Route Initiative has adopted an AI-enhanced approach to streamline services for pilgrims arriving from various countries for this Hajj season, Saudi Press Agency reported on Sunday.
Uing technology and digital solutions, the initiative simplifies the pilgrimage journey, particularly through expedited entry procedures into Saudi Arabia via dedicated lounges at pilgrims’ home country airports.
The initiative employs advanced digital technology to provide the best services to pilgrims while also ensuring the highest level of comfort throughout their journey.
Services include the issuing of electronic Hajj visas, biometric data collection, completion of passport procedures in specialized lounges at departure airports, ensuring health requirements are met, and efficient luggage tagging and sorting. After arrival in the Kingdom, pathways are assigned, and partner agencies ensure hassle-free delivery of pilgrims’ luggage to their accommodation.
Chairman of Pakistan Ulema Council President Hafiz Tahir Ashrafi praised the program for simplifying procedures for pilgrims, both in their home countries and on arrival.
He said that the initiative had made the Hajj journey easier, simpler and faster, and thanked the Saudi government and the Kingdom’s leadership for their commitment to serving pilgrims with the highest technological standards.
SPA accompanied pilgrims benefiting from the initiative at Islamabad’s airport, observing the proficient work of Saudi personnel involved in the project.
KFUPM’s 10th design expo celebrates student ingenuity
DHAHRAN: The King Fahd University of Petroleum and Minerals hosted its tenth Design Expo on Saturday, with senior students’ graduation projects highlighting solutions to real industry problems.
President of the university, Mohammed Al-Saggaf, spoke to each team and handed out awards. It was during his tenure as president that the new model for the expo was put into place.
“This exhibition is distinguished by the collaborative effort among students from different majors to create innovative projects,” the university said in a statement.
Mimicking industry standards, the university event also briefs the soon-to-be professionals on how to pitch and speak about their projects to the public, potential investors and educators.
“This exhibition will showcase various academic projects presented by our students in diverse fields,” the statement said.
A total of 1,063 students participated to present 185 projects “devising solutions for industrial challenges” in the following categories: artificial intelligence, automation technology, construction technology, digital transformation, drone technology, energy systems, environmental technology, health care technology, renewable energy, sustainability and technology enhancement.
The winning projects included an autonomous wheelchair that uses electromyography — EMG — a technique for evaluating and recording the electrical activity produced by skeletal muscles.
Prizes were also awarded for the most entrepreneurial project, the most innovative project and the best elevator pitch, along with an award based on public voting and the president’s choice award.
The most humanitarian project award was handed to “Quick-Construct Housing for Refugees and the Impoverished,” to six students: Alwaleed Talal Abutaleb and Abdulaziz Talal Abutaleb from the architectural engineering and construction management program; Ayoub Abdullah Alsalamah from mechanical engineering; Ammar Omar Alhawsawi from electrical engineering; and Faris Abdulrahman Alsuhaibani and Bander Nasser Almubaddel from aerospace engineering.
“All of this is Saudi-made, even the manufacturing process. It’s the first of its kind in Saudi Arabia, the mechanism and everything — from designing to construction — was assembled by a Saudi company,” Almubaddel told Arab News.
In a record three minutes, the structure can be built and lived in almost instantly. Their target is the refugees in the Middle East — to offer durable, affordable, portable shelter that can be assembled easily and efficiently.
Abutaleb, who focused on the architectural elements, said: “What we brought to the table (is) that we designed the unit, the dimension, the process and the interior of the unit. We are responsible for the integration of the system within the unit, in addition to the construction and the assembling.”
Electrical engineering student Alhawsawi said: “I contributed the power system and all the connections required; and all the power systems that will be integrated into the unit.”
Aerospace engineering student Alsuhaibani added: “The unit is very simple to assemble — these materials that we used to construct the unit have a very high resistance for the heat. It has item resistance, and it can withstand the harsh environment in Saudi Arabia.”
The team will continue to work on the project beyond the classroom to make it useful in the real world.
Saudi project clears 2,010 Houthi mines in Yemen
- A total of 442,077 mines have been cleared since the start of the initiative in 2018
RIYADH: Saudi Arabia’s Project Masam cleared 2,010 mines in Yemen — which had been planted by the Houthi militia — between May 11 to 17, according to a recent report.
Overseen by the Kingdom’s aid agency KSrelief, the project’s specialist teams destroyed 1,980 pieces of unexploded ordnance, 19 anti-tank mines and 11 anti-personnel mines.
The explosives, which were planted indiscriminately by the Houthis across Yemen, posed a threat to civilians, including children, women and the elderly.
Project Masam is one of several initiatives undertaken by Saudi Arabia at the request of King Salman, which has cleared routes for humanitarian aid to reach the country’s citizens.
The demining operations took place in Marib, Aden, Jouf, Shabwa, Taiz, Hodeidah, Lahij, Sanaa, Al-Bayda, Al-Dhale and Saada.
A total of 442,077 mines have been cleared since the start of the initiative in 2018, according to Ousama Al-Gosaibi, the project’s managing director.
The initiative trains local demining engineers and provides them with modern equipment. It also offers support to Yemenis injured by the devices.
About 5 million people have been forced to flee their homes since the beginning of the conflict in Yemen, many of them displaced by the presence of land mines, according to the Project Masam website.
Masam teams are tasked with clearing villages, roads and schools to facilitate the safe movement of civilians and the delivery of humanitarian aid.
Alkhobar’s farmers’ market ends on a sweet note
ALKHOBAR: Alkhobar seafront bustled with activity as the farmers’ market, organized by the Culinary Arts Commission in cooperation with the Ministry of Environment, Water and Agriculture, and the Eastern Province Municipality, came to town.
The three-day evening market, which ended on Saturday, showcased the seasonal bounties of the Eastern Province with homegrown goodies for sale, and quickly attracted more footfall despite the humidity and sweltering heat.
The market featured 15 booths from 10 farmers who were mostly from neighboring areas, along with a few from other parts of the Kingdom.
The Culinary Arts Commission set-up a bookstand in which Saudi-centric, food-related books were on sale in both English and Arabic, as well as games, hoodies and socks.
The family-friendly event was a stone’s-throw from the waves of the corniche, where seating options were ample and offered the perfect spot to relax and snack.
Ghada Abdullah Al-Garyafi, a beekeeper from Qatif for the past four years, told Arab News about participating at the event. “As a Saudi beekeeper, I produce many types of honey in addition to derivative products. I make organic syrup, which is in very high demand, as well as organic honey vinegar.”
Additionally, she offers other items such as honey spoons — sealed spoons filled with honey that can be unwrapped and used to stir tea, or consumed directly.
She also used the event as a way to test out new recipes. “We introduced a new honey drink, with bits of passionfruit and other produce mixed in. I wanted to see the opinion of customers and the visitors to the festival, and they liked it very much.”
Speaking about taking up beekeeping, she explained that what started out as a fear became her whole life. “I used to be afraid of bees! I challenged myself during (COVID-19) period when my husband brought maybe four or five hives within a farm he rented. I would go with him and make a big fuss about being scared,” she said, laughing. “Little by little, he told me to get closer and that they wouldn’t sting me if I wore the protective gear. He showed me how to inspect the hives.
“Eventually, I overcame my fear, thank God, and became a honey producer. I worked during the mangroves season, which was my first experience. All of our production comes from the Eastern region, specifically from Qatif, Saihat, Safwa and Ras Tanura,” she said.
Other entrepreneurs at the market included the organic company, Planet of Plants at Jenan Al-Nakheel Farm, as well as many other local and regional goods.
Children could have their faces painted or their names written in Arabic calligraphy during the event. A live oud player serenaded the crowd.
The farmers’ market is just one of the stops in the commission’s seasonal tour, which will continue in the coming weeks.
Saudi envoy to Dhaka praises Makkah Route efficiency
- Makkah Route Initiative streamlines the performance of Hajj for Bangladeshi pilgrims
RIYADH: Saudi Ambassador to Bangladesh Issa bin Youssef Al-Duhailan lauded the Makkah Route Initiative as a unique program that streamlines the performance of Hajj for Bangladeshi pilgrims, the Saudi Press Agency reported on Sunday.
Al-Duhailan highlighted the initiative’s role in the Pilgrim Experience Program, a Saudi Vision 2030 program focused on enhancing services for Hajj performers, and emphasized how the initiative has significantly improved the Kingdom’s organization and planning for pilgrims visiting the holy city of Makkah.
“The initiative showcases excellence in management, organization, and efforts to facilitate the journey of pilgrims to the holy lands,” Al-Duhailan said.
The initiative’s features, he added, include the issuance of electronic Hajj visas and luggage coding at Hazrat Shahjalal International Airport in Dhaka, which enables Bangladeshi pilgrims to be processed upon arrival in Saudi Arabia as domestic travelers and expedites their transportation to their places of residence in Makkah and Madinah.
“Pilgrims are welcomed with hospitality, security, and safety throughout their journey, creating a rich and unforgettable spiritual experience,” Al-Duhailan said, expressing his gratitude to the Saudi leadership for its vision and to all those involved in the Makkah Route Initiative for their dedication to serving Hajj pilgrims.
