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Ed Webb

At Banque Havilland, Abu Dhabi's Crown Prince Was Known as 'The Boss' - Bloomberg - 0 views

  • A trove of emails, documents and legal filings reviewed by Bloomberg News, as well as interviews with former insiders, reveal the extent of the services Rowland and his private bank provided to one of its biggest customers, Mohammed bin Zayed, better known as MBZ, the crown prince of Abu Dhabi and de facto ruler of the United Arab Emirates. Some of the work went beyond financial advice. It included scouting for deals in Zimbabwe, setting up a company to buy the image rights of players on the Abu Dhabi-owned Manchester City Football Club and helping place the bank’s chairman at the time on the board of Human Rights Watch after it published reports critical of the Persian Gulf country.
  • a 2017 plan devised by the bank for an assault on the financial markets of Qatar, a country that had just been blockaded by the UAE, Saudi Arabia, Egypt and Bahrain for allegedly sponsoring terrorism
  • a coordinated attack to deplete Qatar’s foreign-exchange reserves and pauperize its government
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  • One of Rowland’s sons, a senior executive at the Luxembourg-based bank, emailed the plan to Will Tricks, who had swapped a career in the U.K.’s foreign intelligence service MI6 for a job advising MBZ. Tricks, who acted as a go-between for the Rowlands, was paid as a contractor by Banque Havilland. The presentation found its way to the UAE’s ambassador to the U.S., who stored it on his computer under “Rowland Banque Havilland.”
  • Last year, Qatar sued Banque Havilland in London, accusing it of orchestrating a campaign that cost the country more than $40 billion to shore up its banks and defend its currency peg against the U.S. dollar. While the lawsuit has received attention in the media, the extent of other work Banque Havilland did on behalf of MBZ hasn’t been previously reported. Nor has the role of Tricks.
  • Havilland is facing a criminal investigation in Luxembourg for, among other things, its dealings with the family of another head of state, Azerbaijan’s President Ilham Aliyev. It has also had communications with regulators in Luxembourg and the U.K. about the Qatar plan
  • Devising a plan for economic sabotage, whether implemented or not, is beyond the remit of most private banks. But Banque Havilland is no ordinary financial institution. The firm specialized in doing things others might balk at, the documents and emails show. Its clients included kleptocrats and alleged criminals in corruption hotspots including Nigeria and Azerbaijan. Its owners solicited business in sanctioned countries such as North Korea and Zimbabwe.
  • Not all of its clients were pariahs, and none was as important as MBZ, people with knowledge of the matter say. The crown prince, 59, is one of the Arab world’s most powerful leaders. A graduate of Britain’s Royal Military Academy Sandhurst, he commands one of the best-equipped armies in the region and has waged wars in Yemen, Libya and Somalia. He’s not as well-known as his protégé and neighbor Mohammed bin Salman, Saudi Arabia’s crown prince. And he isn’t president of the UAE, a title held by a half-brother.
  • When MBZ wanted to develop a foothold in southern Africa’s commodities market in 2011, Tricks worked with the Rowlands on sourcing potential investments, documents and emails show. They picked Zimbabwe as a hub for the region, but there was a problem. The country was subject to U.S. and European Union sanctions that banned dealings with President Robert Mugabe’s inner circle and many of its state-owned companies. Tricks passed on advice about setting up a trust in Abu Dhabi for any Zimbabwe deals to hide the identities of investors from the U.S. Treasury Department, which oversees sanctions enforcement
  • the UAE is now a major trading partner with the country despite continuing U.S. sanctions, and it opened an embassy there in 2019
  • Robeson, the foundation’s chairman, was elected to the Human Rights Watch board a few months later, in April 2012. He was named to the advocacy group’s Middle East and North Africa advisory committee. “We have been given the complete list of projects currently being undertaken by Human Rights Watch in the Middle East and North Africa,” Robeson wrote soon after joining the board, in a memo he emailed to Jonathan Rowland that he asked him to share with his father. Robeson also said he’d been given detailed notes of a meeting between the group and Britain’s then-Secretary of State for International Development Andrew Mitchell, along with other private briefings.
  • The foundation appears to have had no other purpose than making the Human Rights Watch donations. It was registered in Guernsey after the first gift and wound down when Robeson left the board in 2016.
  • Emma Daly, a spokeswoman for Human Rights Watch in New York, said the organization vetted Robeson at the time he was being considered for the board and couldn’t find any conflicts. She said the group didn’t know about Rowland’s or the bank’s connections to MBZ. Its most recent report on the country noted that, “Despite declaring 2019 the ‘Year of Tolerance,’ United Arab Emirates rulers showed no tolerance for any manner of peaceful dissent.”
  • The presentation is now a key part of the case in which Qatar accuses the bank of orchestrating an illegal UAE-backed campaign to create false impressions about the country’s stability. The UAE is not a defendant. The plan called for setting up an offshore vehicle into which the UAE would transfer its holdings of Qatari debt before buying more of the securities. The fund would also purchase foreign-exchange derivatives linked to the Qatari riyal and buy enough insurance on its bonds—a barometer of a country’s creditworthiness—to “move the price sufficiently to make it newsworthy.” Working with an affiliated party, it would then flood the market with the bonds to create the impression of panicked selling. The presentation also described a public relations drive to “add more fuel to the fire” and suggest Qatar might be struggling to access U.S. dollars.
  • Within weeks of the plan being sent to Tricks, the riyal—under pressure since the beginning of the blockade in June 2017—went into freefall and hit a record low. The yield on Qatar’s 10-year bonds also soared, as did the cost of insuring the country’s debt against default. The currency didn’t recover until November of that year, after the Intercept reported on the Banque Havilland plan.
Ed Webb

Journalist's phone hacked by new 'invisible' technique: All he had to do was visit one ... - 0 views

  • The white iPhone with chipped paint that Moroccan journalist Omar Radi used to stay in contact with his sources also allowed his government to spy on him.They could read every email, text and website visited; listen to every phone call and watch every video conference; download calendar entries, monitor GPS coordinates, and even turn on the camera and microphone to see and hear where the phone was at any moment.
  • Forensic evidence gathered by Amnesty International on Radi’s phone shows that it was infected by “network injection,” a fully automated method where an attacker intercepts a cellular signal when it makes a request to visit a website. In milliseconds, the web browser is diverted to a malicious site and spyware code is downloaded that allows remote access to everything on the phone. The browser then redirects to the intended website and the user is none the wiser.
  • While Amnesty could not definitively state that the Moroccan authorities were behind the attack, the group was able to use forensic evidence to conclude this was very likely the case.
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  • The spyware they found — commonly known as “Pegasus” — can be traced back to the Israeli cyber surveillance company, NSO Group.
  • Radi is an investigative journalist who co-founded the local news site Le Desk, a partner with the Star in the International Consortium of Investigative Journalists. He specializes in the connections between politicians and business people as well as social movements and human rights. In other words, he’s a thorn in the government’s side and a prime target for surveillance, hacking and harassment.
  • “The Moroccan authorities are buying every possible and imaginable surveillance and espionage product. They want to know everything.”
  • NSO Group, which was valued at $1 billion USD last year, sells surveillance software to governments and law enforcement agencies intended to combat terrorism. Over the last several years, however, reports from around the world have implicated NSO Group’s spyware in the targeting of journalists and human rights activists.
  • A recent report by The Citizen Lab at the University of Toronto’s Munk School identified 13 journalists, including a reporter for the New York Times, targeted by Pegasus software employed by the Mexican and Saudi Arabian governments.
  • what makes Radi’s case unique is that he was infected last September, only three days after the Israeli company issued a policy that vowed the company would cut off clients if they were found to misuse the surveillance technology to target journalists and human rights activists
  • Amnesty’s new report notes that the NSO server used to hack Monjib and El Bouchattaoui was shut down shortly after the previous report was made public. Shortly afterward, a new server that operated in the same manner was set up and used to hack Radi’s phone, the report said.
  • This month, an article on the Moroccan news website Chouftv reported that Radi was part of a group of journalists organizing a support campaign for an imprisoned colleague. Radi says the article contained details taken from conversations he had on the encrypted apps Signal and WhatsApp, and he suspects government intelligence officers leaked the information gleaned from his phone.“It’s a way of saying: ‘You are being watched,’ ” he said.Radi’s sources have grown more reluctant to talk as it has become evident that journalists’ phones are being tapped.
Ed Webb

Iran Says Face Recognition Will ID Women Breaking Hijab Laws | WIRED - 0 views

  • After Iranian lawmakers suggested last year that face recognition should be used to police hijab law, the head of an Iranian government agency that enforces morality law said in a September interview that the technology would be used “to identify inappropriate and unusual movements,” including “failure to observe hijab laws.” Individuals could be identified by checking faces against a national identity database to levy fines and make arrests, he said.
  • Shajarizadeh and others monitoring the ongoing outcry have noticed that some people involved in the protests are confronted by police days after an alleged incident—including women cited for not wearing a hijab. “Many people haven't been arrested in the streets,” she says. “They were arrested at their homes one or two days later.”
  • Iran’s government has monitored social media to identify opponents of the regime for years, Grothe says, but if government claims about the use of face recognition are true, it’s the first instance she knows of a government using the technology to enforce gender-related dress law.
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  • Decades ago, Iranian law required women to take off headscarves in line with modernization plans, with police sometimes forcing women to do so. But hijab wearing became compulsory in 1979 when the country became a theocracy.
  • Mahsa Alimardani, who researches freedom of expression in Iran at the University of Oxford, has recently heard reports of women in Iran receiving citations in the mail for hijab law violations despite not having had an interaction with a law enforcement officer. Iran’s government has spent years building a digital surveillance apparatus, Alimardani says. The country’s national identity database, built in 2015, includes biometric data like face scans and is used for national ID cards and to identify people considered dissidents by authorities.
  • Some face recognition in use in Iran today comes from Chinese camera and artificial intelligence company Tiandy. Its dealings in Iran were featured in a December 2021 report from IPVM, a company that tracks the surveillance and security industry.
  • US Department of Commerce placed sanctions on Tiandy, citing its role in the repression of Uyghur Muslims in China and the provision of technology originating in the US to Iran’s Revolutionary Guard. The company previously used components from Intel, but the US chipmaker told NBC last month that it had ceased working with the Chinese company.
  • When Steven Feldstein, a former US State Department surveillance expert, surveyed 179 countries between 2012 and 2020, he found that 77 now use some form of AI-driven surveillance. Face recognition is used in 61 countries, more than any other form of digital surveillance technology, he says.
Ed Webb

https://www.tap.info.tn/en/Portal-Society/11743641-ugtt-issues-101?utm_source=Project+o... - 0 views

  • The Tunisian General Union of Labour (UGTT) said it has issued a series of questions to be addressed to political parties and candidates for the upcoming legislative and presidential elections, aiming to identify their electoral programmes and assist voters in their choice.
  • 10 major themes, serving to identify the programmes and ideas of political parties “in excruciating details in the political, security, economic and social fields,"
  • The answers will be collected by UGTT to be analysed and integrated into an electronic platform, through which voters can inspect the programmes of the parties and candidates and identify their convergences and divergences.
Ed Webb

How Twitter is gagging Arabic users and acting as morality police | openDemocracy - 0 views

  • Today, Twitter has a different story, and it is not one of speaking truth to power. Twitter is no longer empowering its users. Its platform cannot be considered neutral. Twitter’s actions suggest it is systematically suppressing voices in the Middle East and North Africa (MENA) region.
  • What started out as an investigation into the mass suspension of accounts of Egyptian dissidents, uncovered a mass censorship algorithm that targeted users who use Arabic flagging their text as hateful conduct. This story is still unfolding. As you read this, mass and unjustified systemic locking and suspension of Twitter Arabic accounts continues. Users are angry and bewildered.
  • draconian yet lazy algorithms have systematically shut down voices of dissent – and pulled unsuspecting social media users down with them
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  • The effects of these suspensions was not just hiding a set of tweets critical of the government, but completely disabling the influence network of Egypt’s dissidents. This is potentially the first documented politically motivated mass shutdown of twitter accounts at a time when online interaction was high and translated to possible action on the ground
  • accusations are not limited to Egypt but the entire region who have a sense that being critical of their governments was met with punitive measures by Twitter against them
  • many of those suspensions had a common denominator: being critical of the Egyptian government
  • suspensions seemed to have happened around late September and lasted from one day to a few days. In many cases Twitter had responded that they had suspended the accounts by mistake. The accounts affected varied from having a few followers to hundreds of thousands
  • a trending anti-Sisi hashtag disappeared suddenly in July 2018, and then later on in 2019. It didn’t help either to find that an officer in the British Army information warfare unit was head of editorial in Twitter for the MENA region.
  • I interviewed @OfficialAmro1, a user affected by mass suspensions with over 265K followers and 115K tweets. He was suspended without cause and added, “I don’t even curse.”To which I foolishly replied, “Cursing would not suspend your account, particularly if directed against a public figure. Incitement will.”“No, now it does,” he replied. He also added that if you criticize a figure loyal to the Arab regimes, you can get your account locked or suspended.
  • The 'hateful conduct' policy as defined by Twitter states: You may not promote violence against or directly attack or threaten other people on the basis of race, ethnicity, national origin, sexual orientation, gender, gender identity, religious affiliation, age, disability, or serious disease.Analyzing the message contents that were flagged for hateful conduct I saw that most did not violate Twitter’s rules. Soon I began to discover that what @OfficialAmro1 had told me was true. The content I was seeing contained profanity. But that wasn’t the whole story.Arabic curse words are used often. I sampled around a little under 50 claims, with over 30 screenshots that contain Twitter’s email identifying the violating tweet. It was clear that profanity alone was not causing the suspensions.
  • Tragically funnier still are those who were joking around with their friends using their usual language that has profanities @ism3lawy_ ended up cursing Egypt’s Zamalek football club and for that his account was suspended permanently along with that of one of his friends. In a separate conversation, his friend @EHAB_M0 was also joking around with his friends and eventually got a permanent suspension.
  • Within seconds of my post, the algorithm identified the curse words and locked my account for 12 hours. It was my first violation ever. The irony of documenting this as a reply to the platform’s account is probably lost on them.
  • the most dangerous and disconcerting of my findings is that the appeal system in Twitter for MENA is broken.
  • Even things like talking about prostitution can get you banned
  • There is an element of guardianship that is present in despotic Arab regimes, and that moral guardianship is reflected in the algorithm by Twitter as was shown through the numerous examples above.
  • With my limited access to Twitter’s data, I have found nearly 20 accounts probably wrongfully and permanently suspended. I imagine hundreds or even thousands more have been kicked off the platform.
  • “Thank you for trying to help make Twitter a free space once again.”
Ed Webb

As Discontent Grows in Syria, Assad Struggles to Retain Support of Alawites - 0 views

  • Though the choreographed optics are intended to placate the community, pictures of Assad meeting with the distressed and offering shallow assurances are unlikely to offset the sight of cataclysmic flames devouring their homes. In a video shared on Twitter, an Alawite man films a fire surrounding his home. He sarcastically thanks the state for enabling its spread “because it’s irrelevant if we live or die.” In another video, a group of Alawites is seen criticizing government officials for their indifference, including a minister, whom they claim arrived for a photo op then subsequently drove off to avoid answering questions. The demographic’s small size and geographic concentration guarantees that word of such transgressions spreads quickly. The author’s Alawite sources on the coast echo these frustrations and claim they are widespread. They angrily questioned why neither the state nor its Iranian and Russian allies had assisted, especially given the proximity of the latter’s airbase at Khmeimim to the coastal mountains. 
  • On Oct. 9, state media’s Alikhbaria broadcast a video depicting a handful of Syrian soldiers struggling to put out small fires. Owing to severe water shortages, the troops were forced to use tree branches in lieu of hoses or buckets of water. The video was later shared on Twitter, where it elicited a mixture of mockery and condemnation from opponents of the regime. However, Alawite overrepresentation in the military means that these visuals denote a sense of loss and despair to the community.
  • The armed forces make up a key pillar of Alawite identity and have for nearly a century constituted their main institutional vehicle for attaining upward social mobility and prestige. The community’s loss of more than one third of their men of military age fighting for the regime against an overwhelmingly Sunni armed opposition has further entrenched this interdependence
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  • Conversations within the community center on the divide between the elites and the impoverished Alawites who are commonly linked to the discourse of sacrifice. Economic implosion and the decimation of the Syrian pound have effectively thrust a formerly comfortable middle class into poverty. Whereas Alawites are disproportionately represented in the public sector, the average state salary – a meager 50,000 SYP ($21) per month – means that the vast majority live well below the poverty line, as the average family, according to a Syrian newspaper, requires 700,000 SYP ($304) per month in order to live comfortably. 
  • In October alone, the price of gasoline increased twice, while the cost of diesel – used for residential heat and cooking, in addition to operating bakeries and fueling Syria’s cheapest mode of transportation, microbuses – more than doubled. Basic necessities have become virtually unaffordable.
  • Many of the communities impacted by the fires are subsistence farmers that depend on the profits accrued from harvesting crops such as olives, citrus, and tobacco. They commonly require a mixture of short- and long-term loans from the state’s Agricultural Cooperative Bank. Yet systemic corruption, mismanagement, and a collapsed economy have depleted state coffers, making it unlikely that the regime will compensate those whose homes and livelihoods have been destroyed.
  • in an interview with pro-regime radio station Sham FM, a resident of Alawite al-Fakhoura asserts the funds are being distributed by local officials in a nepotistic fashion. This example illustrates that, in the improbable case that Assad secures the necessary finances, his regime cannot prevent its clientelist networks from capturing them
  • diffusion of power since 2011 has led to unprecedented corruption amid the rise of relatively autonomous war profiteers, from militias to businessmen
  • Outside of individual members hailing from a class of intellectuals, artists, and political dissidents, few Alawites actively joined the uprising in 2011. Those who did generally partook in cross-confessional protests that stressed national unity.
  • In August 2015, the president’s cousin, Suleiman al-Assad, shot and killed a decorated Syrian Air Force colonel in Latakia City in a bout of road rage. According to the colonel’s brother, Suleiman had disparaged the Syrian military before killing the officer. Protests calling for Suleiman’s execution ensued in the Alawite neighborhood of Al-Zira’a. The debasing of the army – viewed as the only buffer between Alawites and a vengeful, sectarian opposition – by a privileged member of the ruling class struck a political nerve.
  • The spread of parasitic pro-regime militias operating with impunity and their disregard for breadlines, gas queues, and ration restrictions, in addition to their harassment of people desperately awaiting their turn, has contributed to an atmosphere in which fights break out. In Latakia and Hama, these fights have reportedly resulted in a few deaths.
  • time-tested tactic of externalizing blame and deflecting responsibility is currently being sustained by several exogenous factors. These include the presence of Turkish and American troops on Syrian soil and their support for rival armed actors, the sporadic persistence of Israeli strikes, and the implementation of U.S. sanctions through the Caesar Act, which collectively breathe life into the regime’s otherwise exhausted rhetoric
  • People considering organizing widespread civil disobedience are deterred by the specter of pre-emptive detention by the dreaded mukhabarat. The regime’s periodic security reshuffling further blurs the ability to identify potentially dangerous agents within their own community, magnifying the perceived threat posed by the omnipresence of informants.
  • the regime’s inability to check its repressive impulses could lead to a situation in which Alawites related to members of the officer corps are arrested and tortured – or worse, disappeared – for public critiques of the government, causing backlash from its own coercive forces
  • the deterioration of living standards could ultimately lead to a breaking point. 
  • Any organized dissent would require the support of its rank-and-file soldiers, most of whom share similar, if not identical, grievances with the wider community, and could thus be sympathetic. This could potentially cause a schism within the Alawite community as familial allegiances are weighed against loyalty to the Assad dynasty and its regime, particularly if ordered to repress protests in Alawite areas.
  • The only conceivable scenario in which Assad’s departure can occur at the hands of the Alawites while salvaging the state and avoiding further regional instability would be through a palace coup led by disgruntled officers and backed by Russia. However, the likelihood that Russia could simply replace or abandon Assad, its growing frustrations notwithstanding, is low, not least due to lack of an alternative.
  • Iranian entrenchment, both within the formal institutions of the regime and the state’s security landscape more broadly, continues to exploit Assad’s tenuous authority in order to obstruct Russian attempts to monopolize patronage.
  • Iran is a force for regime continuity. By creating a parallel network of control that bypasses the state, Iran has thus far been able to reproduce its influence, particularly through its ongoing relations with a patchwork of non-state militias, while resisting Russian efforts at vertically integrating these actors into the formal structures of a centralized Syrian state
  • the regime played the leading role in engineering facts on the ground critical to corroborating the false binary at the heart of its survival: Either accept the stability and security of the state – however perilous – or test the genocidal dispositions of the “jihadist” opposition.
  • This idea – that the president is innocent despite being surrounded by villains – is not uncommon among the Alawites.
  • Apart from the Turkish-backed factions in the north, the threat of Sunni reprisals occupies less of an immediate concern to most Alawites than their ability to secure food, shelter, and transportation amid a shattered economy and unstable currency
Ed Webb

Ennahdha Refuses to Sign Good Governance Charter - Tunisia Live : Tunisia Live - 0 views

  • “They want to depoliticize mosques and schools. What about unions?” he asked. “I don’t understand their refusal to depoliticize unions.”
  • He criticized Ennahdha’s hesitance to make mosques politically neutral, even though they have become “a nest for Salafis to promote extremist concepts such as Jihad.”
Ed Webb

Syria Comment » Archives » Dera'a is Falling - 0 views

  • Other Arabic websites have said that MP Waleed Zoubi is from Dera’a. In the session of parliament, he stated that 20 days ago he alerted the presidency and government to the presence of armed militants who were taking control of specific locations, but that no responsive action was forthcoming. His words before the parliament were not framed as a protest but as an alert to Syrians, yet such honesty in the parliament is still uncommon. Zoubi presented his remarks as one concerned about seeing the muhafiza overrun by insurgents. Nevertheless, his open acknowledgment of loss of both territory and the morale of regime forces in Dera’a elicited objections from other MPs who tried to silence him, whereupon he demanded that they not interrupt him.     Photo from Sana What remains fascinating is the dance that must be performed around the reality of events on the ground. It’s permissible to say that foreign terrorists are causing havoc in Syria, but it’s not acceptable to acknowledge that the uprising includes Syrian participants, let alone that the uprising is primarily Syrian—that’s been the case from the beginning. But that other MPs would try to prevent Zoubi, even at this late hour, from merely discussing in parliament the practical problem of a very real loss of territory is a telling reminder of the persistence of the Ba’athist cult of unreality. How can the regime fight its war without acknowledging its battles? Is it loyalty to mention terrorism, but treason to admit losses? Is patriotism the acknowledgment of conflict with “unknown” assailants coupled with a simultaneous pretending that no failure is occurring? Zoubi mentioned the descent of Syria into a state of war and warned that “if terrorists prevail, chaos will prevail,” yet apparently, even if an area is falling out of the regime’s control, it is still taboo to acknowledge it directly. Subsequent Syrian news coverage of the parliamentary session made no mention of Zoubi.
Ed Webb

U.S. Embassy Attack In Yemen Makes West Uneasy Over Ali Abdullah Saleh's Role In Transi... - 0 views

  • Ali Abdullah Saleh's continuing sway over Yemen is worrying Gulf neighbours and Western nations who fear that the political transition could descend into chaos
  • "We share the concern over the role that the former president and those hardcore elements around him are playing right now," a senior Western diplomat in Sanaa said, adding they were undermining the government and hindering the transition. "We do have concerns about their resistance to following the legitimate orders of President Hadi."
  • Restoring stability in Yemen has become an international priority for fear that Islamist militants will further entrench themselves in a country neighbouring top oil exporter Saudi Arabia and lying on major world shipping lanes.
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  • Of all the complications to reestablishing state control, including southern secessionists, a Zaydi Shi'ite revival movement tussling with Sunni Islamists and a covert U.S. missile war on militants, the role of Washington's former strongman in Sanaa has emerged as perhaps the most pressing
  • Saleh still wields influence through his control of the General People's Congress (GPC) party, a ruling coalition partner, and through powerful relatives who run elite military and security units
  • "Revenge dominates in Yemeni society. If people feel wronged and no one gives them justice they will try to get it themselves in any way," said Human Rights Minister Hooria Mashhour.
  • Political analyst Abdulghani al-Iryani said there was little chance of the old order reestablishing itself, though Saleh and the north Yemeni tribal and religious elites would try to resist the shift to decentralisation. "It's impossible. If you look at the historical patterns, his regime survived for so long against the law of gravity," Iryani said.
Ed Webb

OPEC Is in its Death Throes | Foreign Policy - 0 views

  • In February, OPEC called for an oil production “freeze” to raise crude prices in conjunction with Russia. But this effort collapsed at a meeting in Doha, Qatar, in April when Iran refused to join any freeze in order to regain the pre-2012 production levels of close to 4 mbpd it enjoyed before U.S. and European Union nuclear sanctions were imposed, following the removal of certain sanctions after the 2015 nuclear deal. A similar proposal failed at the OPEC meeting in June, again following Iran’s refusal, despite outreach by the Qataris.
  • OPEC again called for a form of output cut on Sept. 28 at an extraordinary meeting in Algiers. Markets bit on the news, with Brent prices rising sharply by about 15 percent in the following week, from $46 to $52 per barrel.
  • Can action by the cartel sustain higher crude prices over the long term? Probably not. Like a desert mirage, the image of an OPEC resurrection vanishes when approached.
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  • The massive fall in oil prices from over $100 per barrel in early 2014 to under $30 by January 2016 was caused primarily by then-Saudi Minister of Petroleum Ali al-Naimi’s strategy to gain market share for the kingdom and hurt the U.S. tight oil (or “shale”) industry by allowing the market, not OPEC interventions, to set prices.
  • While Riyadh has cranked up its production from mid-2014 to today by over a million barrels a day (to a peak of 10.7 mbpd in August this year), its fiscal position has taken a serious blow, with the budget deficit rising from 3 percent of GDP to 16 percent in 2015
  • The resilience of U.S. shale makes the argument that OPEC has experienced a resurrection a fragile claim. The cartel can probably raise prices in the short term through an output cut, but it will only be so long, perhaps already by mid-2017, before the U.S. shale industry revives and grabs any market share conceded by OPEC in a higher price environment. This will ultimately bring prices lower again, all else being equal.
  • Within OPEC, while other Gulf Co-Operation states, namely Kuwait and the United Arab Emirates, may be prepared to make a small cut to their production, key producers like Iraq and Venezuela are in too difficult a fiscal position to agree to any major cut.
  • Outside OPEC, Russia reached a production record of 11.1 mbpd in August, eclipsing Soviet levels. Being so close to the maximum anyway, Russia has little to lose by supporting the OPEC output cut and agreeing not to raise production further. Yet the Kremlin is unlikely to impose actual cuts on the range of oil companies that operate in the country.
  • In the short term, it seems Riyadh’s fiscal position was under such pressure from low oil prices that something had to give. While the kingdom has eased the fiscal pressure by starting to issue sovereign debt, the burn rate through its foreign reserves has been relentless (from about $740 billion in mid-2014 to $550 billion today) as it has attempted to defend the currency in the face of substantial capital flight from the country since the oil price crash in 2014.
  • Climate change will plainly be a major problem of the 21st century, and the world is moving away from fossil fuels: game over for an unreformed Saudi Arabia.
  • Saudi Arabia will face hard years ahead as the oil market increasingly looks to U.S. shale, not OPEC, as a handrail to oil prices on the supply side. However, this might well be the jolt that Salman needs to push through painful but necessary reforms
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