Tag Archives: Saudi Arabia

IEA expects OPEC production will fall this year

An oil pump jack can be seen in Cisco, Texas, August 23, 2015. REUTERS/Mike Stone

By Sarah McFarlane

LONDON (Reuters) – Crude prices firmed on Thursday after the International Energy Agency (IEA) said non-OPEC production would fall this year by the most in a generation and help rebalance a market dogged by oversupply.

IEA chief Fatih Birol said low oil prices had cut investment by about 40 percent over the past two years, with sharp falls in the United States, Canada, Latin America and Russia.

Benchmark Brent crude futures were up 12 cents at $45.92 a barrel by 1204 GMT. U.S. crude futures were 4 cents higher at $44.22. Both have gained about 70 percent from lows hit between January and February.

“It looks very strong at the moment, sentiment is bullish, technicals look fine, so I rather see prices rising further from here,” Commerzbank analyst Carsten Fritsch said.

The drop in supply from some producers, however, could be offset by increased output in countries such as Russia and Iran.

Russia’s energy minister said it might push oil production to historic highs and Iran has reiterated its intention to reach output of 4 million barrels per day after a global deal to freeze output collapsed and Saudi Arabia threatened to flood markets with more crude.

Libya could also rapidly ramp up oil production as soon as stability returns, the head of Libya National Oil Corporation (NOC) told an oil summit in Paris.

Nigeria will hold talks with Saudi Arabia, Iran and other producers by May, hoping to reach a deal on an output freeze at the next OPEC meeting in June, where it is expected to be a key item on the agenda.

“The focus of the market is primarily on price-supportive news and that’s just an indication of how sentiment is,” Saxo Bank senior manager Ole Hansen said.

Hansen said fund flows into commodities had been strong this week, driven by a weaker dollar.

The U.S. currency hit 10-month lows against some commodity-related currencies earlier this week. The Thomson Reuters Core Commodity Index rose to its highest since early December. [MKTS/GLOB]

“This whole recovery has been driven by supply being capped and supply is price sensitive and again we’re back to levels where we could see some of these producers breathe again,” Hansen said.

French bank BNP Paribas said any hope of the oil market rebalancing from the current surplus relied on a predicted decline in U.S. oil production.

“The U.S. accounts for the bulk of non-OPEC’s 2016 oil supply contraction of 700,000 barrels per day forecast. If the decline in the U.S. oil supply proves insufficient to tighten balances, then … the oil price will remain low,” it said.

In refined products, China’s exports of diesel and gasoline soared, spilling surplus fuel onto a market that is already well supplied, and threatening to cut Asian benchmark refining margins further.

(Additional reporting by Henning Gloystein in Singapore and Osamu Tsukimori in Tokyo; editing by David Evans and David Clarke)

Yemen fighting to halt April 10, peace talks start April 18

UNITED NATIONS (Reuters) – The warring parties in Yemen have agreed to a cessation of hostilities starting at midnight on April 10 and peace talks in Kuwait beginning a week later, United Nations special envoy Ismail Ould Cheikh Ahmed said on Wednesday.

There have already been several failed attempts to defuse the conflict in Yemen, which has drawn in regional foes Saudi Arabia and Iran and triggered a humanitarian crisis in the Arab world’s poorest country.

“This is really our last chance,” Ould Cheikh Ahmed told reporters in New York. “The war in Yemen must be brought to an end.”

A Saudi-led coalition began a military campaign in Yemen a year ago with the aim of preventing Iran-allied Houthi rebels and forces loyal to Yemen’s ex-president Ali Abdullah Saleh from taking control of the country.

Ould Cheikh Ahmed said Saudi Arabia is “fully committed to make sure that the next talks take place and particularly supports us with regard to the cessation of hostilities.”

The United Nations says more than 6,000 people, half of them civilians, have been killed since the start of the Saudi-led military intervention whose ultimate aim is to restore President Abd-Rabbu Mansour Hadi to power.

U.S.-based rights group Human Rights Watch said on Wednesday that the United States, Britain, France and others should suspend all weapons sales to Saudi Arabia over what the group deemed unlawful air strikes.

“The only way to limit the damage is for countries to stop providing weapons to Saudi Arabia,” said Philippe Bolopion, Human Rights Watch deputy global advocacy director.

The Saudi-led coalition has targeted civilians with air strikes and some of the attacks could be crimes against humanity, U.N. sanctions monitors told the Security Council in January.

Ould Cheikh Ahmed said prominent Yemeni figures would be enlisted to cooperate with a de-escalation and coordination committee on the cessation of hostilities and “to report on progress and security incidents.”

He said the peace talks would focus on five areas: a withdrawal of militia and armed groups; a handover of heavy weaponry to the state; interim security arrangements; restoration of state institutions; and resumption of inclusive political dialogue.

The warring parties have been asked to present a concept paper on each of these areas by April 3, the U.N. envoy said.

Al Qaeda in the Arabian Peninsula (AQAP), an affiliate of the global Sunni Muslim militant organization, has also expanded its foothold in the country as the government focuses on its battle with the Houthi rebels.

(Reporting by Michelle Nichols; Editing by Chris Reese and James Dalgleish)

IEA says OPEC, Russia oil output freeze deal may be ‘meaningless’

SINGAPORE (Reuters) – A deal among some OPEC producers and Russia to freeze production is perhaps “meaningless” as Saudi Arabia is the only country with the ability to increase output, a senior executive from the International Energy Agency (IEA) said on Wednesday.

Brent crude futures are up more than 50 percent from a 12-year low near $27 a barrel hit early this year, bouncing back after Russia and OPEC’s Saudi Arabia, Venezuela and Qatar struck an agreement last month to keep output at January levels.

Qatar has invited all 13 members of the Organization of the Petroleum Exporting Countries (OPEC) and major non-OPEC producers to Doha on April 17 for another round of talks to widen the production freeze deal.

“Amongst the group of countries (participating in the meeting) that we’re aware of, only Saudi Arabia has any ability to increase its production,” said Neil Atkinson, head of the IEA’s oil industry and markets division, at an industry event.

“So a freeze on production is perhaps rather meaningless. It’s more some kind of gesture which perhaps is aimed … to build confidence that there will be stability in oil prices.”

Libya has joined Iran in snubbing the initiative, and the absence of the two OPEC producers – both with ample room to increase output – would limit the impact of any success in broadening the freeze at the April meeting.

The rise in output from Iran in the first quarter post-sanctions has been in line with IEA’s expectation of 300,000 barrels per day (bpd), Atkinson said, adding that Tehran’s output could rise again by the same amount by the third quarter.

“Iran has not exactly been flooding the market with lots more oil. It seems to be far more measured,” Atkinson said.

It will take a while for Iran to regain its pre-sanctions share in Europe, where markets have been taken over by Saudi Arabia, Russia and Iraq, he added.

The IEA, energy watchdog for the Organisation for Economic Co-operation and Development (OECD), expects the wide gap between supply and demand to narrow later this year, paving the way for an oil price recovery in 2017.

“We think the worst is over for prices … Today’s prices may not be sustainable at exactly $40 a barrel, but in this mid-$30s and upward range, we think there will be some support unless there’s a major change in fundamentals,” Atkinson said.

(Reporting by Florence Tan; Editing by Tom Hogue)

Yemen peace talks expected in Kuwait next month, official says

CAIRO (Reuters) – Talks aimed at ending Yemen’s war are expected in Kuwait next month along with a temporary ceasefire, a senior Yemeni government official said, raising the prospect of an end to violence that has killed thousands.

There have already been several failed attempts to defuse the conflict in Yemen, which has drawn in regional foes Saudi Arabia and Iran and triggered a humanitarian crisis in the Arab world’s poorest country.

On Tuesday Saudi-led airstrikes targeting al Qaeda-linked militants in eastern Yemen killed and wounded dozens of people, a provincial governor and medics said.

“The talks will be on April 17 in Kuwait, accompanied by a temporary ceasefire,” the Yemeni official said, declining to be named. There were two inconclusive rounds of peace talks in Switzerland last year.

A Saudi-led coalition began a military campaign in Yemen a year ago with the aim of preventing Iran-allied Houthi rebels and forces loyal to Yemen’s ex-president Ali Abdullah Saleh from taking control of the country.

There was no immediate response from the Houthi militia regarding the prospect of talks. A prisoner swap and pause in combat on the border with Saudi Arabia earlier this month had raised hopes of a push to end the war.

Tuesday’s Saudi-led airstrikes hit an area west of Mukalla, a port city and capital of the Hadramout province. Residents said at least 30 militants were killed and many more wounded. A spokesman for the Saudi-led alliance was not immediately available for comment.

Al Qaeda in the Arabian Peninsula (AQAP), an affiliate of the global Sunni Muslim militant organisation, has expanded its foothold in the country as the government focuses on its battle with the Houthi rebels.

The United Nations says more than 6,000 people have been killed since the start of the Saudi-led military intervention whose ultimate aim is to restore President Abd-Rabbu Mansour Hadi following his ousting by Houthi and pro-Saleh forces.

“It has been a terrible year with air strikes, shelling and localized violence. An already very impoverished country has been put at a very sharp end,” Jamie McGoldrick, U.N. Resident and Humanitarian Coordinator in Yemen, told reporters in Geneva.

One in ten Yemenis is displaced, he said, adding that half of those killed and injured were civilians.

He said U.N. special envoy Ismail Ould Cheikh Ahmed had been in the capital Sanaa over the past few days for discussions with parties involved and also was in Riyadh.

“What they are hoping for is to put in place a ceasefire of some kind or a cessation of hostilities for a week or so prior to the talks and build confidence,” he said.

The spokesman for the Saudi-led coalition and Saudi Foreign Minister Adel al-Jubeir have said that any peace talks can take place only between Hadi and the Houthis, and through the U.N. special envoy.

(Additional reporting by Mohamed Mukashaf in Aden and Stephanie Nebehay in Geneva; Writing by Sylvia Westall; Editing by Mark Heinrich and Richard Balmforth)

Major fighting in Yemen coming to an end, Saudi coalition spokesman says

RIYADH (Reuters) – The spokesman for the Saudi-led coalition battling the Iran-allied Houthis in Yemen has been quoted as saying major fighting in the country is drawing towards a close, one year after the military campaign began.

Fighting on two of the main battlefronts in Yemen, along the border with Saudi Arabia and in the city of Taiz, has calmed this month following mediation by local tribes and there have been secret talks in Saudi Arabia towards finding a resolution.

Saudi TV channel al-Arabiya quoted the spokesman, Brigadier General Ahmed al-Asseri, as saying on Thursday that “the major fighting in Yemen is nearing an end … (and) the next phase is a stage of restoring stability and reconstructing the country”.

Arabiya gave no further details and Asseri could not be immediately reached for comment.

The Saudi-led coalition began its military campaign a year ago with the aim of preventing the Houthi group and forces loyal to Yemen’s ex-president Ali Abdullah Saleh from taking control of the country. It also aims to restore President Abd-Rabbu Mansour Hadi to power in the capital Sanaa.

Asseri and Saudi Foreign Minister Adel al-Jubeir have in recent days said that any peace talks can only take place between Hadi and the Houthis, and through the U.N. special envoy Ismail Ould Cheikh Ahmed.

Asseri announced last April that the coalition’s initial operation had ended, saying it had “neutralized most of the military capabilities of the Houthi militias and their allies that represented a threat to Yemen and neighboring countries”.

However, the fighting then intensified as the coalition added small numbers of ground troops to support Yemeni fighters, backed by an increasingly heavy air campaign.

The coalition retook Yemen’s second city, Aden, from the Houthis and Saleh’s forces in July, the northeastern town of Marib in September and the small northwestern port of Midi this year.

Bitter fighting in Taiz since the autumn calmed somewhat this month and a Houthi siege of the city ended. Near-daily attacks on Saudi border positions have gone on for months, killing hundreds of the kingdom’s soldiers and civilian residents of frontier regions.

More than 6,000 Yemenis, about half of them civilians, have been killed in the fighting and airstrikes over the past year, the United Nations says. Millions more have been displaced.

(Reporting By Angus McDowall; Editing by Gareth Jones)

Saudi Arabia says it will punish anyone linked to Hezbollah

DUBAI (Reuters) – Saudi Arabia said on Sunday it would punish anyone who belongs to Lebanon’s Iran-backed Shi’ite Islamist group Hezbollah, sympathizes with it, supports it financially or harbors any of its members.

An Interior Ministry statement carried by the state news agency SPA said that Saudis and expatriates would be subjected to “severe penalties” under the kingdom’s regulations and anti-terrorism laws. Foreigners would be deported, it said.

The move comes after Gulf Arab countries declared Hezbollah a terrorist organisation, raising the possibility of further sanctions against the group, which wields influence in Lebanon and fights alongside President Bashar al-Assad’s forces in Syria.

“Any citizen or resident who supports, shows membership in the so-called Hezbollah, sympathises with it or promotes it, makes donations to it or communicates with it or harbours anyone belonging to it will be subject to the stiff punishments provided by the rules and orders, including the terrorism crimes and its financing,” the statement said.

Foreigners working and living in the oil-exporting kingdom would also face expulsion, it said.

Hezbollah has close ties to Iran, Saudi Arabia’s bitter rival for power in the region. Saudi Arabia supports Syrian opposition groups to topple Assad and blames Iran and Hezbollah for helping him cling to power after five years of civil war.

Hezbollah leader Sayyed Hassan Nasrallah has stepped up criticism of Saudi Arabia, accusing it of directing car bombings in Lebanon.

(Reporting by Sami Aboudi; Editing by Kevin Liffey, Larry King)

Saudi Arabia, Houthis swap prisoners, raising hopes of Yemen peace talks

CAIRO/RIYADH (Reuters) – A Saudi-led coalition fighting in Yemen said on Wednesday it had exchanged prisoners with its Houthi opponents and also welcomed a pause in combat on the border, prompting hopes of a push to end the year-long war that has killed some 6,000 people.

Riyadh’s confirmation of a rare confidence-building measure in the conflict came a day after senior Yemeni officials said a delegation from the Houthis, who are allies of the kingdom’s arch foe Iran, was in Saudi Arabia for talks to end the war.

However, both the Saudi Arabian and Yemeni foreign ministers later said any formal negotiations to end the fighting could only take place under the auspices of the United Nations and must include Yemen’s internationally recognized government.

Riyadh and a coalition of Arab states entered Yemen’s civil war a year ago in an attempt to restore President Abd-Rabbu Mansour Hadi after the Houthis and forces loyal to former president Ali Abdullah Saleh ousted him from power.

The Saudi state news agency SPA said Yemeni tribal mediators had facilitated the exchange of a Saudi lieutenant captured by the Houthis for seven Yemeni prisoners held in the kingdom.

The agency gave no further details, but some Yemeni media have reported that the exchange happened on the border between the two countries earlier this week.

Quoting a Saudi statement, SPA also said: “The leadership of the coalition forces welcomed the continuation of a state of calm along the border … which contributes to arriving at a political solution.”

After meeting his Gulf Arab and Yemeni counterparts, Saudi Foreign Minister Adel al-Jubeir said he backed U.N. special envoy Ismail Ould Cheikh Ahmed’s efforts to resolve the crisis based on U.N. resolution 2216, which calls on the Houthis to return power to Hadi’s government.

However, he added in a news conference that the lull was important to deliver aid and medical supplies to people in northern regions of Yemen.

Saleh’s General People’s Congress party said in a statement it supported any efforts to bring peace to Yemen.

HOUTHIS SNUB IRAN

Yemen’s conflict has fallen into a stalemate, in which the Houthis still control the capital Sanaa and other major cities in central Yemen, while its guerrilla forces have shelled and harassed Saudi forces along the rugged northern frontier.

In what could be a goodwill message to Saudi Arabia, a senior Houthi official sought to distance his group from Riyadh’s main regional foe Tehran, telling Iranian officials in a Facebook posting to stay out of Yemen’s conflict.

“Officials in the Islamic Republic of Iran must be silent and leave aside the exploitation of the Yemen file,” said Yousef al-Feshi, a member of the Revolutionary Committee which runs areas of Yemen held by the Houthis.

Asked about the posting, Jubeir said he had not seen it but that it appeared to be a “positive” statement.

Sunni power Saudi Arabia has long accused Shi’ite Iran of trying to expand its influence in Yemen by helping the Houthis, who hail from the Zaydi branch of Shi’ite Islam.

The comments by Feshi, who is seen as close to the Houthis’ overall leader Abdel-Malek al-Houthi, were the first snub by the group to Iran, long seen as its main supporter.

On Tuesday, Brigadier General Masoud Jazayeri, deputy chief of staff of Iran’s armed forces, suggested that Tehran could send military advisers to help the Houthis in Yemen just as it has done in Syria in support of President Bashar al-Assad’s forces.

The coalition spokesman, Brigadier General Ahmed al-Asseri, said Yemeni tribal chiefs had asked for a period of calm to let humanitarian supplies pass through but he declined to be drawn into commenting on the reported visit by a Houthi delegation.

“It is too early to focus on those who are carrying out this role,” Asseri told the Saudi-owned al-Arabiya TV. “Let’s focus on the result, that there be benefit to our brothers who are affected by what the Houthi militias are carrying out. We do not want to talk about individuals.”

Yemeni Foreign Minister Abdelmalek al-Mekhlafi said the talks in Saudi Arabia were “on the intelligence level about prisoners and other issues”, adding that peace talks could only happen in accordance with the U.N. resolution.

“This is the only way forward with political negotiations. Anything else is operational and not political,” Mekhlafi said after the meeting with his Gulf Arab counterparts in Riyadh.

(Additional reporting by Yara Bayoumy and Noah Browning in Dubai, Omar Fahmy in Cairo, Writing by Sami Aboudi; Editing by Gareth Jones)

Yemen’s Houthis in Saudi Arabia for talks on ending war

CAIRO/DUBAI (Reuters) – Iran-allied Houthis and their Saudi foes have begun talks to try to end Yemen’s war, two officials said, in what appears their most serious bid to close a theater of Saudi-Iranian rivalry deepening political tumult across the Middle East.

A delegation from Yemen’s Houthi movement is in neighboring Saudi Arabia, they said, in the first visit of its kind since the war began last year between Houthi forces and an Arab military coalition led by Saudi Arabia, a foe of Tehran.

The reported talks coincide with an apparent lull in fighting on the Saudi-Yemen border and in Saudi-led Arab coalition air strikes on the Houthi-held Yemeni capital Sanaa.

Underlining the regional rifts, a senior Iranian military official meanwhile signaled that Iran could yet send military advisers to Yemen to help the Houthis.

Brigadier General Masoud Jazayeri, deputy chief of staff of the armed forces, suggested Iran could support the Houthis in a similar way it has backed President Bashar al-Assad’s forces in Syria, in an interview with the Tasnim news agency.

Asked if Iran would send military advisers to Yemen, as it had in Syria, Jazayeri said: “The Islamic Republic … feels its duty to help the people of Yemen in any way it can, and to any level necessary.”

Saudi Arabia has accused Iran of backing Yemen’s armed Houthi movement, which drove the internationally-recognized government into exile, triggering a Gulf intervention in March.

SIX THOUSAND KILLED

The United Nations says nearly 6,000 people have been killed in Yemen’s fighting. Hundreds of thousands have been displaced.

The two senior officials from the administrative body that runs parts of Yemen controlled by the Houthis said the Houthi visit to Saudi Arabia began on Monday at the invitation of Saudi authorities, following a week of secret preparatory talks.

The Houthi delegation in Saudi Arabia is headed by Mohammed Abdel-Salam, the Houthis’ main spokesman and a senior adviser to Houthi leader Abdel-Malek al-Houthi, the officials said. Abdel-Salam previously led Houthi delegates in talks in Oman that paved the way for U.N.-sponsored talks in Switzerland last year.

A spokesman for the Saudi-led Arab coalition fighting to restore President Abd-Rabbu Mansour Hadi to power could not immediately be reached for comment. A Saudi foreign ministry spokesman could also not be reached.

Like Syria, Yemen is contested turf in Shi’ite Muslim Iran and Sunni Saudi Arabia’s power struggle across the Middle East, which has played out along largely sectarian lines.

Tehran views the Houthis as the legitimate authority in Yemen but denies providing any material support to them. The Houthis say they are a fighting a revolution against a corrupt government and its Gulf Arab backers.

(Additional reporting by Sami Aboudi, Yara Bayoumy, Editing by William Maclean and Ralph Boulton)

Coalition discussed Syria ground incursion, Saudi official says

ANKARA/WASHINGTON (Reuters) – Defense ministers from the U.S.-led coalition against the Islamic State militant group discussed the possibility of a Syrian ground incursion two weeks ago but they have not made a decision, an aide to Saudi Arabia’s defense minister said on Monday.

“It was discussed two weeks ago in Brussels,” Brigadier General Ahmed Asseri said in a telephone interview from Riyadh. “It was discussed at the political level but it wasn’t discussed as a military mission,” he said.

“Once this is organized, and decided how many troops and how they will go and where they will go, we will participate in that,” he said. “We need to discuss at the military level very extensively with the military experts to make sure that we have a plan.”

Asseri also said the kingdom was now ready to strike Islamic State from Turkey’s southern Incirlik air base, where four Saudi fighter jets arrived last week. The jets have not yet participated in any attacks, he added.

The U.S. State Department said the Saudis had previously talked about the possibility of introducing ground forces in Syria to fight Islamic State, but there were many issues that needed to be discussed about a potential incursion.

Deploying ground forces would be a major escalation for the 66-member U.S.-led coalition against Islamic State, which has so far relied mainly on air strikes and arming and equipping moderate Syrian opposition groups.

State Department spokesman John Kirby said at a news briefing in Washington that the Saudis had talked about “the potential of an introduction of some sort of ground force element in Syria” and that the United States would welcome such a contribution in the fight against Islamic State.

“But there’s a lot that needs to be discussed in terms of what they would do, what their makeup would be, how they would need to be supported by the coalition going forward. So there’s a lot of homework that needs to be done,” Kirby said.

A U.S. defense official said supporting indigenous anti-Islamic State forces on the ground was a key component of the U.S. strategy against the group.

“We will continue to provide equipment packages to vetted leaders and their units so that over time they can make a concerted push into territory still controlled” by Islamic State, the official said.

“As a matter of policy, we won’t comment or speculate on potential future operations,” the official added.

(Writing by Humeyra Pamuk and Mohammad Zargham; Editing by David Dolan and Lisa Shumaker)

OPEC veteran urges oil output cut, frets about global glut

DOHA (Reuters) – OPEC and non-OPEC producers should cut production to balance the global oil market before a supply glut becomes unmanageable “like a cancer”, Qatar’s former oil minister Abdullah al-Attiyah said.

Attiyah, influential in OPEC as Qatar’s energy minister from 1992 to 2011, said a deal announced in Doha last week by Saudi Arabia and Russia to freeze production at January levels was not enough to balance the market as an oversupply continues to grow.

“If they want to balance the market the solution will be easy. Don’t go slow. If you do, then every time the market will create a glut. Cut 2.5 million barrels and then you will balance the market in a few years,” Attiyah, who says he is talking to producers in and outside of OPEC, told Reuters.

“I will ask every producer, do you want quantity or price? They say they want a reasonable price but to reach that there has to be sacrifice. If you do not sacrifice the other will not sacrifice,” he said in an interview in Doha on Monday.

“The oversupply has grown from 1.7 million barrels per day (bpd) to 3 million bpd today. I am very worried about oversupply. It is like a cancer. If you did not deal with it quickly, it would spread.”

Oil has slid around 70 percent from more than $100 a barrel in mid-2014, pressured by excess supply and a decision by the Organization of the Petroleum Exporting Countries to abandon its traditional role of cutting production alone to boost prices.

Attiyah spoke before Saudi Oil Minister Ali al-Naimi said on Tuesday he was confident more nations would join a pact to freeze output at existing levels in talks expected next month, but effectively ruled out production cuts by major crude producers anytime soon.

Addressing the annual IHS CERAWeek conference in Houston, Naimi told energy executives that growing support for the freeze and stronger demand should over time ease the glut that has pushed oil prices to their lowest levels in more than a decade.

Traders have been skeptical about whether freezing production near record levels will support the market.

Attiyah, a leading architect of Qatar’s rise to global prominence as gas exporter, said OPEC would not cut production alone but added that Saudi Arabia, the world’s largest oil exporter and defacto leader of OPEC, was willing to cooperate with other producers to balance the market.

“Saudi Arabia needs a commitment from everyone. The Saudis will be big supporters — but others have to join in,” he said.

“OPEC will never do it alone. No way OPEC will do it alone: 100 percent.”

One stumbling block in attempts to forge a wider agreement is Iran, which is increasing output following the lifting of Western sanctions in January and whose oil minister was quoted on Tuesday as calling the deal “laughable”.

(Editing by Susan Thomas)