High oil prices will outface Saudi spending promises

2018 ◽  
Keyword(s):  
Saudi Arabia ◽  
Oil Prices ◽  
Content Type

Headline SAUDI ARABIA: Spending promises will not moderate oil

What influences bank lending in Saudi Arabia?

2020 ◽  
Vol 27 (2) ◽  
pp. 125-155
Author(s):  
Ken Miyajima
Keyword(s):  
Saudi Arabia ◽  
Private Sector ◽  
Balance Sheet ◽  
Oil Prices ◽  
Bank Lending ◽  
Policy Implications ◽  
Content Type ◽  
Balance Sheets ◽  
Level Data ◽  
Bank Balance Sheets

PurposeDeterminants of credit growth in Saudi Arabia are investigated.Design/methodology/approachA panel approach is applied to macroeconomic and bank-level data spanning 2000 ‐15.FindingsBank lending is supported by strong bank balance sheet conditions (high capital ratio, and growth of NPL provisioning and deposits), and higher growth of both oil prices and non-oil private sector GDP. Lower bank concentration also helps, likely through greater competition, so does stronger institution. Consistent with the literature, lending by Islamic banks may be more responsive to economic activity. Lending remained robust in 2015 despite oil prices having declined, helped by strong bank balance sheets and as banks reduced their holdings of “excess liquidity”. To support bank lending in the period ahead, bank balance sheets need to remain strong. Fiscal adjustment and a reduced reliance on banks to finance the budget deficit would support credit provision to the private sector.Originality/valueThe paper is first to analyze in detail determinants of bank lending in Saudi Arabia applying a panel approach to bank level data, and draws critical policy implications.

Iran-Saudi Arabia tensions will increase instability

2016 ◽  
Keyword(s):  
Saudi Arabia ◽  
Oil Prices ◽  
Arab State ◽  
Religious Leaders ◽  
Medium Term ◽  
Content Type ◽  
Verbal Exchanges

Significance This followed a marked intensification of hostile verbal exchanges between Iranian and Saudi officials and religious leaders in the weeks leading up to the annual pilgrimage to sacred Islamic sites in Saudi Arabia in mid-September. The two countries' mutual hostility prevented Iranian citizens from taking part in the hajj. Iran's developing ties with both Russia and Turkey are also raising mutual tension with Saudi Arabia. Impacts Tension between Iran and Saudi Arabia will hinder future efforts by oil producers to agree a strategy leading to a rise in global prices. Mutual hostility between Tehran and Riyadh will be a major factor behind the failure of international efforts to end the war in Yemen. Medium-term low oil prices may threaten Saudi Arabia's ability to provide further financial bail-outs to Egypt, a key Sunni Arab state.

Kuwait energy sector expansion will hit obstacles

2015 ◽  
Keyword(s):  
Saudi Arabia ◽  
Natural Gas ◽  
Crude Oil ◽  
Production Capacity ◽  
Oil Prices ◽  
Energy Sector ◽  
Global Market ◽  
Oil Refinery ◽  
Content Type ◽  
Crude Oil Production

Subject Prospects for Kuwait's energy sector expansion Significance Despite falling revenue because of the slump in global oil prices Kuwait is embarking on two ambitious energy ventures: constructing what will be the region's largest new oil refinery and increasing crude oil production capacity by more than 1 million barrels per day (b/d) by 2020. Impacts Increased oil output capacity will bolster Kuwait' s effort to retain market share in an over-supplied global market. Kuwait is emulating Saudi Arabia in integrating its refining and petrochemical sectors, though diversification will lag. Kuwait will incur Saudi displeasure by developing closer ties with post-sanctions Iran, a possible supplier of new natural gas supplies.

Saudi oil policy will hold firm to market-led approach

2016 ◽  
Keyword(s):  
Saudi Arabia ◽  
Supply And Demand ◽  
Oil Prices ◽  
Supply Management ◽  
Export Markets ◽  
Content Type ◽  
Output Capacity ◽  
Oil Policy

Significance The decision came three days after Saudi Arabia confirmed during an OPEC meeting that it intends to persist in allowing oil prices to be determined by supply and demand, rather than supply management. Impacts Saudi-Iranian competition over production levels and export markets will increase bilateral tensions. Saudi production is likely to increase to fill the gap created by falling global stocks and low upstream capex impacts. This will put OPEC cohesion under strain. The return of Nigerian, Libyan and Kenyan production and a new price collapse would test Saudi non-intervention resolve. Slower than planned progress in phasing out oil may require an output capacity hike post-2020.

Doha disagreement delineates Saudi-Iranian rivalry

2016 ◽  
Keyword(s):  
Saudi Arabia ◽  
Comparative Advantage ◽  
Oil Prices ◽  
Short Term ◽  
Content Type ◽  
Industrial Action ◽  
Long Run

Significance Many producers, facing budgetary pressures because of low oil prices, support output restraint, but they need to act in concert. Russia and Saudi Arabia have offered a freeze rather than cuts, and Riyadh is not prepared to adopt any stance that provides a comparative advantage to regional rival Iran. Impacts Prices could rise somewhat in the short term due to the drop in Kuwaiti production caused by industrial action. Another factor pushing up oil prices could be any further upward revision to the expected contraction in US crude output. Downside risks dominate in the long run, owing to producers' inaction, record inventories and the return of interrupted supplies.

A new OPEC+ deal would not resolve Russia's problems

2020 ◽  
Keyword(s):  
Saudi Arabia ◽  
Middle East ◽  
Growth And Development ◽  
Oil Prices ◽  
Economic Conditions ◽  
Content Type ◽  
Funding Sources ◽  
Global Demand ◽  
Price Management ◽  
Price War

Significance As the COVID-19 pandemic depressed Chinese and global demand for oil, Russia and Saudi Arabia broke off their three-year price management agreement, sending prices tumbling. Moscow insists it can weather the storm, but low oil prices further complicate the adverse economic conditions stemming from COVID-19. Russia has the funding sources to prop up its budget, but this implies abandoning ambitious plans to invest in growth and development. Impacts The disintegration of OPEC+ would undermine Russia's wider attempts to win political partners in the Middle East. Kazakhstan and Azerbaijan signed up to OPEC+ but are less willing or able to side with Russia in a price war. Rosneft's divestment of its Venezuelan assets shows a greater sensitivity to sanctions risks in a tougher market.

Poorer Oman may align more closely with Saudi Arabia

2021 ◽  
Keyword(s):  
Saudi Arabia ◽  
United Arab Emirates ◽  
Oil Prices ◽  
Gulf Cooperation Council ◽  
Economic Situation ◽  
Regional Environment ◽  
Content Type ◽  
Economic Problems ◽  
Industrial Sectors ◽  
Dominant Influence

Significance The sultan this month paid his first foreign visit to Saudi Arabia, establishing institutions for ongoing cooperation. Under the previous ruler, Muscat was wary of Riyadh’s dominant influence in the Gulf Cooperation Council (GCC). However, both the regional environment and Oman’s economic situation are now in a state of flux. Impacts New Saudi investment in Oman would likely focus on the tourism and industrial sectors. Higher oil prices will provide only a temporary reprieve for Muscat’s structural economic problems. Omani interactions with the United Arab Emirates could become more fraught.

Saudi Arabia will use security risks to manage dissent

2017 ◽  
Keyword(s):  
Saudi Arabia ◽  
Critical Infrastructure ◽  
Oil Prices ◽  
Buffer Zone ◽  
Security Risks ◽  
Social Reforms ◽  
Internal Security ◽  
Content Type ◽  
Counter Terrorism ◽  
Urban Security

Significance Although Riyadh’s control of internal security is strong, it is facing a time of change, with an untried interior minister, bureaucratic reorganisation in the counter-terrorism apparatus and the prospect of further far-reaching and potentially destabilising economic and social reforms. Beyond transnational Sunni salafi-jihadist groups such as IS, key internal threats include Shia dissidents, salafi oppositionists and blowback from the Yemen war. Impacts Saudi Arabia will prolong its war in Yemen until a buffer zone can be developed to end missile attacks. Oil prices may experience brief shocks as critical infrastructure is threatened. Riyadh will boost security spending, especially on the Yemen border and in Shia areas. Arms purchases will focus more on missiles, border security and urban security.

Riyadh will aid Baghdad, but oil prices could spike

2018 ◽  
Keyword(s):  
Saudi Arabia ◽  
Oil Prices ◽  
Content Type

Headline IRAQ/SAUDI ARABIA: Oil could spike despite Saudi aid

Spending drive gives Gulf military edge over Iran

2015 ◽  
Keyword(s):  
United States ◽  
Saudi Arabia ◽  
United Kingdom ◽  
Oil Prices ◽  
The United States ◽  
Content Type ◽  
Counter Measures ◽  
Defence Spending ◽  
Mean Current

Subject Gulf defence spending. Significance GCC defence spending has accelerated significantly since 2009. In 2014 alone there has been a 14% increase, from 99 billion dollars in 2013, to 113.72 billion dollars. They now have a decisive edge over Iran in any conventional war, and are seeking to develop more effective counter-measures to Iran's asymmetric and nuclear threats. Impacts Falling oil prices mean current high levels of defence spending are unsustainable. The United States, France and United Kingdom will remain valuable security guarantors, particularly in the naval sphere. Saudi Arabia and the UAE may seek to test their armed strength in risky confrontations with Iran.

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