Tag: Saudi Arabia

OPEC+ says delayed meeting will now be held online

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The delayed OPEC+ meeting next week will be held online instead of in-person as the cartel wrangles over production levels amid a slump in oil prices.

Saudi Arabia and its allies are embroiled in a dispute over output quotas for African members. The disagreement has forced the group to push back its scheduled conference by four days to November 30, sending crude plunging by as much as 4.9% to below $80 a barrel in London on Wednesday.

Before the delay, oil traders had thought Saudi Arabia was gearing up to announce an extension of its unilateral 1 million barrel-a-day cutback in a bid to prop up faltering prices. There were also some predictions that Riyadh could even steer other members into joining them with additional curbs of their own.

The spat puts that outcome in doubt and dredges up a disagreement from June, when Angola, Congo and Nigeria were pushed by Saudi Energy Minister Prince Abdulaziz bin Salman to accept reduced output targets for 2024 that reflected their diminished capabilities. The African exporters have struggled in recent years with under-investment, operational disruptions and aging oil fields.

It’s not the first time that the 23-nation OPEC+ alliance has altered its plans at short notice. It did the same a year ago, shifting its meeting online after fixing production targets at a face-to-face gathering in Vienna the previous month.

This time around, the rescheduled meeting on November 30 coincides with the first day of United Nations climate talks which are being hosted by OPEC-member the United Arab Emirates in Dubai. Holding in-person talks in Vienna on the same day as the start of COP28 would have created logistical difficulties for a number of energy ministers.

Traders are now waiting to see whether the Organization of Petroleum Exporting Countries and its partners will resolve the rift on quotas, and agree any measures to shore up the market in 2024. Absence of an agreement on production for next year would leave global oil markets in a precarious position.

Crude is down about 16% from its September peak amid surprisingly strong American output, while China — the world’s biggest oil importer — has seen falling refining margins and faltering economic indicators.

World markets are poised to tip back into surplus early next year as demand growth slows drastically, while producers like the US and Guyana continue to grow, according to the International Energy Agency.

At the same time, Iranian supplies have recovered as the US relaxes its enforcement of sanctions, and Russian exports have held steady as the country pumps more than its quota.

OPEC+ delegates say they’re seeking extra time as Angola and Nigeria chafe at lower targets pressed on them by more powerful members. The countries had reluctantly acquiesced to the new quotas with the caveat that they’d be revised higher again if an external audit by three firms — Rystad Energy A/S, Wood Mackenzie Ltd. and IHS — proved their capacity was larger.

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OPEC+ delays meeting by four days on struggles over African quotas

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The 23-nation OPEC+ coalition has pushed back a gathering to finalise output levels for 2024 by four days to November 30. Delegates say they’re seeking extra time as Angola and Nigeria chafe at lower targets pressed on them by more powerful members.

Saudi Arabia and its oil allies are once again struggling with a dispute over output quotas for African members, forcing the group to delay the critical meeting.

Before the delay announced on Wednesday, oil traders had thought Saudi Arabia was gearing up to announce an extension of its unilateral 1 million barrel-a-day cutback in a bid to prop up faltering prices. There were also some predictions that Riyadh could even steer other members into joining them with additional curbs of their own.

Instead, the Organisation of Petroleum Exporting Countries and its partners announced a postponement of their upcoming gathering, a move that took many members by surprise. The news deepened the recent selloff in crude prices, which slumped as much as 4.9% to below $79 a barrel in London.

“Moving a meeting like that is simply a big deal,” said Jan Stuart, global energy economist at Piper Sandler & Co. in New York. “You don’t lightly do that.”

The spat dredges up a disagreement from June, when Angola, Congo and Nigeria were pushed by Saudi Energy Minister Prince Abdulaziz bin Salman to accept reduced output targets for 2024 that reflected their diminished capabilities. The African exporters have struggled in recent years with under-investment, operational disruptions and aging oil fields.

The countries had reluctantly acquiesced to the new quotas with the caveat that they’d be revised higher again if an external audit by three firms — Rystad Energy A/S, Wood Mackenzie Ltd. and IHS — proved their capacity was larger. That assessment has been submitted, but the trio have rejected its findings, officials said, speaking on condition of anonymity.

Nigeria has shown recently that it can surpass its new limits. It pumped 1.416 million barrels a day last month, or 36,000 barrels a day above its target for 2024, according to data from OPEC’s Vienna-based secretariat.

As part of the deal agreed in June, the United Arab Emirates secured the right to increase production modestly in January in order to deploy recent capacity additions. It’s unclear whether there’s any pressure now for Abu Dhabi to relinquish that boost in order to shore up flagging markets.

The revised meeting date of November 30 will coincide with the first day of the United Nations climate talks, known as COP28, which are taking place in the UAE city of Dubai. Delegates say it’s uncertain whether the belated gathering will be in Vienna, as originally planned, or held as an online webinar.

The absence of an OPEC+ agreement on production for next year would leave global oil markets in a precarious position.

Crude is down about 18% from its September peak amid surprisingly strong American output, while China — the world’s biggest oil importer — has seen falling refining margins and faltering economic indicators. World markets are poised to tip back into surplus early next year as demand growth slows drastically, while producers like the US and Guyana continue to grow, according to the International Energy Agency.

At the same time, Iranian supplies have recovered as the US relaxes its enforcement of sanctions, and Russian exports have held steady as the country pumps more than its OPEC+ quota.

Crude’s retreat has brought relief for consumers squeezed by years of rampant inflation, but it spells discomfort for exporters like the Saudis. Riyadh may need prices closer to $100 a barrel as it splashes on construction mega-projects and high-profile sports players, Bloomberg Economics estimates.

Demand growth is very strong but there is a lot more supply than expected so OPEC+ needs to cut, Pierre Andurand, the renowned oil trader and founder of Andurand Capital Management, said in an interview with Bloomberg television.

“The Saudis will probably want the other countries to cut as well,” Andurand said. “It’s going to be a negotiation.”

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Arabia eyes stake in $30 billion Indian Cricket League

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Arabia has expressed interest in buying a multibillion-dollar stake in the Indian Premier League, international cricket’s most lucrative event, following a string of investments that have upended professional sports including football and golf.

Crown Prince Mohammed bin Salman’s advisers have sounded out Indian government officials about moving the IPL into a holding company valued at as much as $30 billion, in which Saudi Arabia would then take a significant stake, people familiar with the matter said. The talks were held when the kingdom’s defacto ruler visited India in September, the people said, asking not to be named as the information is not public.

Under plans discussed at the time, the kingdom proposed investing as much as $5 billion into the league and help lead an expansion into other countries, similar to the English Premier League or the European Champions League, the people said.

While the Saudi government is keen to press on with a deal, the Indian government and the country’s powerful but opaque cricket regulator — BCCI — are likely to take a call on the proposal after next year’s federal elections, the people said. The BCCI is led by Jay Shah, the son of India’s Home Minister Amit Shah — a close ally of Premier Narendra Modi.

Saudi Arabia’s powerful sovereign wealth fund, which has anchored many of the kingdom’s previous sports investments, could ultimately be the vehicle used to do a deal with the BCCI if an agreement is reached. No final decisions have yet been made.

Representatives for the BCCI and the Saudi government’s Center for International Communication didn’t respond to requests for comment. The Public Investment Fund declined to comment.

Since its inception in 2008, the IPL has married American-style marketing with the glitz of Bollywood and the energy of India’s vast population. The IPL’s central strategic move was to discard cricket’s traditional format for broadcast-friendly three or four hour games that encourage big, risky swings and frequent “sixes,” cricket’s equivalent of a home run.

The league has drawn a plethora of sponsors, including Aramco and the Saudi tourism authority. And despite a season that runs for just eight weeks each spring, bidders last year paid $6.2 billion for the right to broadcast IPL games through 2027. That works out to $15.1 million per match, more than the EPL and just behind the $17 million networks pay for each game in the National Football League in the US.

Any Saudi investment into the IPL or changes to the league’s format will likely mean those agreements for media rights will need to be reworked, according to people familiar with the matter.

Global Cricketing Destination

Over the past few years, Saudi Arabia has splashed out billions of dollars on sports and the chairman of the sport’s governing body in the kingdom has said he wants to turn the nation into a global cricketing destination.

“You can’t compete with money, especially the money that Saudi Arabia is throwing around to certain people,” England cricket captain and one of the world’s top players, Ben Stokes, said in an interview this year.

Meanwhile, other attempts to replicate the IPL formula overseas are underway. Major League Cricket, a US upstart part-funded by Satya Nadella and Shantanu Narayen — the chief executive officers of Microsoft Corp. and Adobe Inc. respectively — concluded its first season in July.

That league, and others in South Africa, the United Arab Emirates and elsewhere, haven’t dented the IPL’s commercial dominance.

For Saudi Arabia, any investment in cricket would come after significant spending on sports, primarily golf and football. The PIF backed the LIV Golf tour, which this year agreed to a shock merger with the PGA Tour.

Saudi Arabia has also led a group that bought English Premier League football club Newcastle United FC, and is now on the brink of hosting the 2034 FIFA World Cup. As part of its push into the world’s most popular sport, the kingdom has spent millions on the likes of Brazil’s Neymar, France’s Karim Benzema and Portuguese superstar Cristiano Ronaldo.

That spending has opened up the Saudi government to claims of “sportswashing” its image and human rights record, though the kingdom’s crown prince has emphasized the deals are primarily intended to boost the country’s economy.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Piyush Goyal to attend 7th Future Investment Initiative in Riyadh on Oct 24 & 25, meet Saudi govt officials

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Union Minister for Commerce and Industry, Piyush Goyal, is scheduled to attend the 7th Edition of Future Investment Initiative (FII) in Riyadh, Saudi Arabia, on October 24-25, 2023.

The theme for the 7th Edition of FII, “The New Compass,” focuses on the new global order. The event is expected to witness participation from the world’s leading investors, business leaders, policymakers, inventors and explorers.

FII Institute is a global non-profit foundation launched by Saudi Arabia, which aims to gather global government and business leaders to discuss new pathways for investment with the goal to create a global impact on humanity, with the following four areas of focus: Artificial Intelligence (AI) & Robotics, education, healthcare and sustainability.

Goyal is scheduled to meet his Saudi counterpart Majid bin Abdullah AlKassabi, the Saudi Energy Minister Prince Abdul Aziz Bin Salman Al-Saud, Investment Minister Khalid A. Al Falih, Industry and Mineral Resources Minister Bandar bin Ibrahim AlKhorayef, and Governor of the Saudi Public Investment Fund (PIF) Yassir Rummayyan, among the Saudi Arabian government officials.

Goyal is also expected to co-chair a conclave session on the theme “From Risk to Opportunity: Strategies for Emerging Economies in the New Industrial Policy Era,” along with the Saudi Arabian Investment Minister.

He is also slated to interact with the Indian community apart from business leaders and CEOs from across the world.

India-Saudi Arabia trade reached an all-time high of $52.75 billion in FY 2022-23. Cooperation between the two countries has also increased with the establishment of the India-Saudi Arabia Strategic Partnership Council (SPC).

Established in 2019, SPC aims to enhance the relationship between the two countries and has two main pillars: the ‘Committee on Political, Security, Social, and Cultural Cooperation’ and the ‘Committee on Economy and Investments.’

India is the fourth country with which Saudi Arabia has formed such a partnership; after the UK, France and China. In September 2023, India’s Prime Minister Narendra Modi and Saudi Arabia’s Crown Prince Mohammed Bin Salman Al Saud co-chaired the first summit-level meeting of SPC.

The meeting focused on critical areas of energy security, trade and investment, defence and security, healthcare and food security.

Also read: PM Modi, Saudi Crown Prince discuss ways to unlock potential of India-Saudi Arabia Strategic Partnership

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Saudi Arabia pauses normalisation of ties with Israel after Gaza turmoil

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Only months after it considered normalising relations with Israel, Saudi Arabia has put the plans on hold following the intense war between the militant group Hamas and Israeli Defence Forces. In an official statement, the foreign ministry of Saudi Arabia, affirmed its rejection of the calls for the “forcible displacement of the Palestinian people from Gaza”, reiterating its condemnation of the continued targeting of unarmed civilians.

Under the leadership of Crown Prince Mohammed bin Salman, Saudi Arabia, which has never officially acknowledged Israel, showed signs that it would relent provided the US gave it security assurances and civil nuclear programme support.

However, Hamas’ latest attack on a music festival in Israel which left over 260 people dead triggered a retaliatory action, killing thousands and wounding scores of others in Gaza. Following Israel’s ‘declaration of war’ on Hamas, the violence intensified, leading to the suspension of any possible talks between the two countries. “Saudi Arabia has decided to pause discussion on possible normalisation and has informed US officials,” revealed a source familiar with the ongoing discussion, as reported by AFP.

The development comes close on the heels of a proposed meeting between Antony Blinken, the US Secretary of State, and his Saudi counterpart on his regional trip. Riyadh has become increasingly worried about the situation in Gaza and has made diplomatic moves to alleviate the continuing struggle, prevent a ‘humanitarian disaster’ and ruin people’s lives in Israel and Palestine.

In addition, there was an unexpected diplomatic outreach between Saudi Arabia and Iran when they talked about the military situation in Gaza. Saudi Arabia has issued sharp criticism over the displacement of Palestinians and the targeting of civilians in Gaza, making the strongest statement against Israeli actions since the commencement of the conflict.

According to the latest reports, the Israel-Hamas war has resulted in the loss of over 1,200 lives in Israel, with more than 2,800 people sustaining injuries. Meanwhile, in Gaza, the ongoing conflict has led to 1,055 killings and 5,183 injuries. The combined death toll of Israel and Palestine has now exceeded 3,200.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Oil prices surge after Hamas’ attack on Israel fans Middle East tensions

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Oil surged more than 3% after Hamas’ surprise attack on Israel over the weekend threatened to destabilize the Middle East, home to a key maritime bottleneck and several top suppliers of crude, fuel and energy to global consumers.

West Texas Intermediate traded above $85 a barrel in early Asian trade as a war-risk premium returned to markets. Traders fear an escalation of the violence — contained in the Middle East for now — could prompt a more devastating proxy war embroiling the US and Iran.

The latest events in Israel don’t immediately form a threat to supply. However, any possible retaliation against Iran amid reports the Islamic Republic was involved in the attacks would inflame fears over the Strait of Hormuz, the vital shipping artery which Tehran has previously threatened to close, as the US sends warships to the region.

“Key for markets is whether the conflict remains contained or spreads to involve other regions, particularly Saudi Arabia,” ANZ Group Holdings Ltd. analysts Brian Martin and Daniel Hynes said in a note. “Initially at least, it seems markets will assume the situation will remain limited in scope, duration, and oil-price consequences. But higher volatility can be expected.”

WTI and London’s Brent futures have plummeted this month, erasing more than $10 a barrel as worries about economies around the world and high interest rates clouded the demand outlook. Those fears overshadowed bullishness that led oil prices to rally in the third quarter as physical balances tightened due to prolonged Saudi-led crude output cuts.

Oil market observers will be watching for signs of a wider fallout involving Washington and Tehran after months of thawing relations. Iran has been exporting more oil in recent months, possibly contributing to moderating global prices. The Islamic state also conducted a rare prisoner swap deal, and freed up billions of dollars of frozen funds from previous oil sales.

“If Israel comes out and directly implicates Iran, we believe it will likely be difficult for the Biden administration to continue to adopt such a permissive sanctions regime,” RBC Capital Markets analyst including Helima Croft said in a note. “We anticipate that critics in Congress and elsewhere will contend that the White House is providing Iran with the financial wherewithal to sponsor such malign actors.”

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India, Saudi Arabia tie up for electrical interconnections, green hydrogen

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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The Government of the Kingdom of Saudi Arabia, represented by the Ministry of Energy, and the Government of the Republic of India represented by the Ministry of Power (hereinafter referred to as the “Parties”) based on friendship bonds between the two countries and their desire to strengthen cooperation between them in the field of electrical interconnection, green/clean hydrogen and supply chains.

Have reached the following understanding:

Article 1

Purpose

This Memorandum of Understanding (MoU) aims to establish a general framework for cooperation between the Parties in the field of electrical interconnection, exchange of electricity during peak times and emergencies, co-development of projects and co-production of green/ clean hydrogen and renewable energy in both countries and establishing secure, reliable and resilient supply chains of materials used in green/ clean hydrogen and the renewable energy sector, in accordance with their capabilities, the applicable laws and regulations of their respective countries and based on the principles of equality, mutual benefit and respect.

Article 2

Areas of Cooperation

The Parties shall enhance cooperation in the field of electricity, Green/ Clean hydrogen and supply chains, particularly on:

1. Conducting necessary feasibility studies (technical, economic and environmental) for the purpose of electrical interconnection between the two countries and co-development of projects and co-production of Green/ Clean hydrogen and renewable energy in both countries.

2. Formulating a timetable for implementation in stages, in accordance with the outcomes of the study.

3. Collaborating with organizations/ companies that are specialized in the field of electrical interconnection and Green/clean Hydrogen.

4. Establishing electrical interconnection(s) and a joint mechanism for co-development of projects and co-production of Green/Clean hydrogen and renewable energy between the two countries based on (1) to (3) above.

5. Establishing secure, reliable and resilient supply chains of materials used in green/ clean hydrogen and the renewable energy sector.

6. Any other areas of cooperation, related to the electrical interconnection, Green/ Clean hydrogen and supply chains that the Parties may agree upon mutually.

Article 3

Implementation Mechanism

The Parties shall form a Joint Working Group (JWG) co-chaired by the Parties (represented by a Joint Secretary from the Ministry of Power of the Government of the Republic of India and a Deputy Minister/Assistant Deputy Minister from the Ministry of Energy of the Government of the Kingdom of Saudi Arabia) and consisting of other members from both Parties; to be responsible for implementing the areas of cooperation mentioned in article 2 of this MoU. The JWG shall work on the necessary procedures and measures that need to be taken to strengthen and develop the cooperation of this MoU and to supervise and pursue implementing the areas of cooperation mentioned in Article 2, between the two countries, in preparation for its tendering, awarding and implementation by specialized companies.

Further, a Joint Steering Committee (JSC) co-chaired by the Parties (represented by a Secretary from the Ministry of Power of the Government of the Republic of India and a Vice/Assistant Minister from the Ministry of Energy of the Government of the Kingdom of Saudi Arabia) and consisting of other members from both Parties shall also be constituted to review the progress made by the Joint Working Group.

The JWG/ JSC shall meet at least once every year in virtual or physical mode as per convenience of both Parties.

The parties may conclude programmes within the framework of this MoU, specifying the activities they agree upon, the method of participation for each Party, the provisions and periods related thereto, the financial aspects, and any other arrangement that may be necessary.

The Parties shall form any other kind of arrangements that may be necessary.

Article 4

Confidentiality

The Parties shall keep confidential the information and contents exchanged between the Parties in relation to this MoU and shall not without the prior written consent of the other party use any of these confidential information and contents for any purpose other than for the purpose of which such confidential information and contents have been given. The commitment of this Article shall remain in force even after the expiration of this MoU.

Article 5

Financial Responsibility

Each Party shall bear its own financial costs arising from the implementation of this MoU unless the Parties agree otherwise through mutual consultations.

Article 6

Intellectual Property

The Parties shall take the necessary measures to protect the intellectual property rights resulting from any activity in the framework of this MoU, in light of the applicable laws and regulations in force in their respective countries and international agreements that both Parties are a party to.

Article 7

Dispute Resolution

Any dispute arising out of the interpretation or application of this MoU shall be resolved by amicable negotiation between the Parties.

Article 8

Legal Affect

While this MoU constitutes an expression of the Parties’ good faith and intent to engage in the cooperation described herein, this MoU does not create any legal rights and obligations that are binding to the Parties and shall not affect the Parties’ obligations rights and privileges derived from any international treaties or agreements to which either or both Parties are a party to.

Article 9

Commencement and Discontinuation

(1) This MoU shall be effective as of the date of the last mutual notice between the Parties–through the diplomatic channels– confirming the completion of the internal regulatory procedures necessary for its entry into force.

(2) This MoU shall remain in effect for five years. It shall be automatically renewed for a similar period or periods unless either Party informs the other Party in writing –through the diplomatic channels– of their desire to terminate or not renew this MoU, and such notices may be given at least three months prior to the date specified for its termination or expiration.

(3) This MoU may be amended by a written agreement of the Parties. Such amendments shall enter into force in accordance with the procedures referred to in Paragraph (1) of this Article.

(4) In the event that this MoU is terminated or not renewed, its provisions shall remain in effect with regard to the programs and activities under which they arose and have not been completed unless the Parties agree otherwise.

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

US-Saudi defence pact linked to Israel deal, Palestinian demands take back seat

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Arabia is determined to secure a military pact requiring the United States to defend the kingdom in return for opening ties with Israel and will not hold up a deal even if Israel does not offer major concessions to Palestinians in their bid for statehood, three regional sources familiar with the talks said.

A pact might fall short of the cast-iron, NATO-style defence guarantees the kingdom initially sought when the issue was first discussed between Crown Prince Mohammed bin Salman and Joe Biden during the US president’s visit to Saudi Arabia in July 2022.

Instead, a US source said it could look like treaties Washington has with Asian states or, if that would not win US Congress approval, it could be similar to a US agreement with Bahrain, where the US Navy Fifth Fleet is based. Such an agreement would not need congressional backing.

Washington could also sweeten any deal by designating Saudi Arabia a Major Non-NATO Ally, a status already given to Israel, the US source said.

But all the sources said Saudi Arabia would not settle for less than binding assurances of US protection if it faced attack, such as the September 14, 2019 missile strikes on its oil sites that rattled world markets. Riyadh and Washington blamed Iran, the kingdom’s regional rival, although Tehran denied having a role.

Agreements giving the world’s biggest oil exporter US protection in return for normalisation with Israel would reshape the Middle East by bringing together two longtime foes and binding Riyadh to Washington after China’s inroads in the region. For Biden, it would be a diplomatic victory to vaunt before the 2024 US election.

The Palestinians could get some Israeli restrictions eased but such moves would fall short of their aspirations for a state. As with other Arab-Israeli deals forged over the decades, the Palestinian core demand for statehood would take a back seat, the three regional sources familiar with the talks said.

“The normalisation will be between Israel and Saudi Arabia. If the Palestinians oppose it the kingdom will continue in its path,” said one of the regional sources. “Saudi Arabia supports a peace plan for the Palestinians, but this time it wanted something for Saudi Arabia, not just for the Palestinians.”

The Saudi government and the US State Department did not respond to emailed questions about this article.

‘Less than a full treaty’

A US official, who like others declined to be named because of the sensitivity of the matter, said the parameters of a defence pact were still being worked out, adding that what was being discussed “would not be a treaty alliance or anything like that… It would be a mutual defence understanding, less than a full treaty.”

The official said it would be more like the US relationship with Israel, which receives the most advanced US weapons and holds joint air force and missile defence drills.

A source in Washington familiar with the discussions said MbS had asked for a NATO-style treaty but said Washington was reluctant to go as far as NATO’s Article 5 commitment that an attack on one ally is considered an attack on all.

The source said Biden’s aides could consider a pact patterned on those with Japan and other Asian allies, under which the US pledges military support but is less explicit about whether US troops would be deployed. However, the source said some US lawmakers might resist such a pact.

Another template, which would not need congressional approval, would be the agreement signed with Bahrain on September 13, in which the US pledged to “deter and confront any external aggression” but also said the two governments would consult to determine what, if any, action would be taken.

The source in Washington said Saudi Arabia could be designated a Major Non-NATO Ally, a step which had long been considered. This status, which several Arab states such as Egypt have, comes with a range of benefits, such as training.

The second of the regional sources said Riyadh was compromising in some demands to help secure a deal, including over its plans for civilian nuclear technology. The source said Saudi Arabia was ready to sign Section 123 of the US Atomic Energy Act, establishing a framework for US peaceful nuclear cooperation, a move Riyadh previously refused to take.

The Gulf source said the kingdom was prepared to accept a pact that did not match a NATO Article 5 guarantee but said the US had to commit to protecting Saudi Arabia if its territory was attacked. The source also said a deal could be similar to Bahrain’s agreement but with extra commitments.

Seeking Israeli Commitments

Israel’s Prime Minister Benjamin Netanyahu has hailed the possibility of a “historic” peace with Saudi Arabia, the heartland of Islam. But to secure the prize, Netanyahu has to win the approval of parties in his a far-right coalition which reject any concessions to the Palestinians.

MbS said in a Fox News interview this month that the kingdom was moving steadily closer to normalising ties with Israel. He spoke about the need for Israel to “ease the life of the Palestinians” but made no mention of Palestinian statehood.

Nevertheless, diplomats and the regional sources said MbS was insisting on some commitments from Israel to show he was not abandoning the Palestinians and that he was seeking to keep the door open to a two-state solution.

Those would include demanding Israel transfer some Israeli-controlled territory in the West Bank to the Palestinian Authority (PA), limit Jewish settlement activity and halt any steps to annex parts of the West Bank. Riyadh has also promised financial aid to the PA, the diplomats and sources said.

Palestinian President Mahmoud Abbas has said any bargain must recognise the Palestinian right to a state within the 1967 borders, including East Jerusalem, and must stop Israeli settlement building. However, all the sources said a Saudi-Israeli deal was unlikely to address those flashpoint issues.

Netanyahu has said Palestinians should not have a veto over any peacemaking deal.

Yet, even if the US, Israel and Saudi Arabia agree, winning support from lawmakers in the US Congress remains a challenge.

Republicans and those in Biden’s Democratic Party have previously denounced Riyadh for its military intervention in Yemen, its moves to prop up oil prices and its role in the 2018 killing of Saudi journalist Jamal Khashoggi, who worked for the Washington Post. MbS denied ordering the killing.

“What’s important for Saudi Arabia is for Biden to have the pact approved by Congress,” the first regional source said, pointing to concessions Riyadh was making to secure a deal.

For Biden, a deal that builds a US-Israeli-Saudi axis could put a brake on China’s diplomatic inroads after Beijing brokered a rapprochement between Saudi Arabia and Iran, which Washington accuses of seeking nuclear arms. Tehran denies this.

“There was a sense that the US has abandoned the region,” said one diplomat. “By courting China, the Saudis wanted to create some anxiety that will make the US re-engage. It has worked.”

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

India-Middle East-Europe Economic Corridor announcement sparks optimism | Expert analysis

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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One of the key announcements made during the recent G20 summit that generated enthusiasm in the Indian stock markets pertains to the India-Middle East-Europe Economic Corridor (IMEEC). This initiative outlines a strategic plan to establish connectivity between India and Europe via the Middle East region. 

The core concept involves the development of a network of railway lines within the Middle East, creating transportation links that connect India and Europe through sea routes on either side. The primary objectives of this initiative are threefold. 

Firstly, it seeks to promote increased trade activities between the involved regions. Secondly, it places emphasis on developing environmentally friendly infrastructure. Lastly, it aims to provide an alternative to the Chinese Belt and Road Initiative (BRI), which has been instrumental in enhancing Chinese influence on a global scale.

This announcement had a positive impact on the stock market, particularly benefiting Adani Ports, as the company had already acquired the Israeli Port of Haifa. Adani Ports is well-positioned to take advantage of the opportunities presented by the IMEEC project.

In an interview with CNBC-TV18, a distinguished panel of guests engaged in a detailed discussion regarding the anticipated outcomes and the pace of progress to be anticipated from this initiative. 

The panel consisting of Navdeep Suri, Former Ambassador to Egypt and UAE who currently serves as a Distinguished Fellow at ORF; Rahul Chhabra, Former Secretary-Economic Relations at MEA with extensive experience as an Ambassador in trade relationships and Somnath Mukherjee, CIO and Senior Managing Partner at ASK Private Wealth.

First up, Chhabra pointed out that the IMEEC corridor carries significant geopolitical significance, particularly in connecting India, the world’s fastest-growing economy, to Europe. However, he expressed uncertainty regarding the timeline for its completion.

Meanwhile, Suri noted that approximately 75 percent of the physical infrastructure is already established, but there is still a need for development in terms of customised infrastructure.

However, Mukherjee said it’s premature to determine if this project is a viable investment opportunity. He added, “Thing that goes in favour of this project, besides the fact that some parts of it are likely already in place like the Etihad Rail, is also the constituent members of the project envisaged, between the United States India and Europe, we have probably the best financial expertise and bandwidth available in the world.”

For more details, watch the accompanying video.

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Saudi Arabia to consider setting up sovereign wealth fund office in India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Saudi Arabia on Monday said it is considering setting up an office of its sovereign wealth fund (SWF) in India to facilitate investments, as the two nations aim to double bilateral trade to $100 billion in the coming years.

Speaking at an event here, Investment Minister of Saudi Arabia Khalid A Al Falih said that within the next few weeks, he would send a strong delegation to Gujarat International Finance Tec-City (GIFT), Gandhinagar, to explore the opportunity to open the office of SWF.

“I will match your offer and commit today that we will open an office in India for investment facilitation…we are talking about bi-directional (facilitation),” he said here at the India-Saudi Arabia Investment Forum meeting.

This is in response to a request by Commerce and Industry Minister Piyush Goyal, he added.

GIFT City in Gujarat is a multi-purpose special economic zone for financial services.

He said that the delegation would explore Gift City, Mumbai or New Delhi.

The Saudi minister also offered to set up a digital and physical space in Riyadh for Indian startups to access markets, partners and funding.

“Hopefully in the next few weeks, we will create a joint agreement between our national venture capital fund and their counterpart in India to channel venture capital and funding to startups that will have the opportunity to leverage our two markets,” he said.

Saudi investments in India stood at $3.22 billion during April 2000-June 2023.

Meanwhile, India’s Commerce and Industry Minister Piyush Goyal said New Delhi and Riyadh can look at doubling bilateral trade to $100 billion in the coming years from about $52 billion at present.

He said the two countries can also look at a more balanced trade.

The minister suggested Saudi Arabia to open an office of their sovereign wealth fund in GIFT city in Gujarat and industry chamber Ficci set up an office in Riyadh in partnership with Invest India, and the commerce ministry to facilitate investments.

“Maybe this could be a way to kick-start a better flow of trade and investments and also to see how we can double our trade, which is currently about $52 billion.

“Can we be more ambitious and take it to $100 billion, can we look at a more balanced trade, can we look at India becoming the provider of food security to Saudi Arabia, while Saudi Arabia helps us provide more energy security like oil and fertiliser. So, it will really be a win-win and complimentary relation,” Goyal said here at an event.

India’s exports to Saudi Arabia have increased to $10.72 billion in 2022-23 from $8.8 billion in 2021-22. Imports, on the other hand, have increased to $42 billion in 2022-23 from $34.1 billion in 2021-22, mainly on the back of oil shipments.

Saudi Crown Prince Mohammed Bin Salman Bin Abdulaziz Al-Saud is currently on a state visit to India after the G20 Summit concluded on Sunday. He is accompanied by a delegation of ministers and businesses.

About 50 MoUs worth $3.5 billion between India and Saudi Arabia have been inked.

India and Saudi Arabia on Monday signed an agreement for cooperation in the field of energy and promote bilateral investments, an official statement said.

“The memorandum of understanding (MoU) between the Government of the Republic of India and the Government of the Kingdom of Saudi Arabia was signed in the national capital on September 10,” the Ministry of New & Renewable Energy (MNRE) said.

The signatories to the pact were Union Minister for New & Renewable Energy and Power RK Singh and Minister of Energy for the Kingdom of Saudi Arabia Abdulaziz bin Salman Al-Saud, the statement said.

According to the MoU, India and Saudi Arabia will cooperate in the areas of renewable energy, energy efficiency, hydrogen, electricity and grid interconnection between the two countries, petroleum, natural gas, strategic petroleum reserves and energy security.

Khalid said that both countries have opportunities for investments.

The announcement of economic corridor, linking India through the middle east, is going to be the new corridor that is equivalent of the silk and spice road, he said, adding this is going to be more significant and relevant because its about new energy, connectivity and human resources.

He added that there is no timeline for the $100 billion investment in India and the projects announced earlier are “still possible”.

Saudi Arabia is looking to invest in different sectors, such as new energy, oil, gas, petrochemicals, manufacturing and defence, Khalid.

The future lies with the young people, the startups, innovators and entrepreneurs and “we need to ensure that we don’t give all of our attention only to big national champions, MNCs. We work to create fertile ground for entrepreneurship as in the next 10-15 years some of them will become our national champions for both the nations”, he noted.

The most important driver going forward for both the countries are their talent and human resource.

“Look at the combination of Saudi Arabia and India, we have scale, skill, and our human resources, our management capabilities, we have capital, and we have a long term vision that will align all of the resources that we have,” he said.

In terms of attractiveness, the Saudi minister said that the two countries should aim to get into “top 10 if not top 5”.

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