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Page added on November 5, 2017

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Oil Price Expected to Remain Steady Despite Shock Arrests in Saudi Arabia

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The market for oil, Saudi Arabia’s most lucrative export, is unlikely to be affected by the arrest of dozens of former Saudi state officials and at least 11 Saudi princes in an anti-corruption drive, financial analysts have said.

On Sunday, it was reported that 11 Saudi princes, four incumbent ministers of the Saudi government and dozens of former government ministers had been arrested in an anti-corruption drive.

Reportedly among those arrested is prominent billionaire Prince Alwaleed bin Talal, owner of the Kingdom Holding Company which has large stakes in businesses and property around the world including Citigroup, Twitter and several luxury hotel chains.

The arrests took place just hours after Saudi ruler King Salman decreed the creation of a powerful new anticorruption committee led by his son and heir, Crown Prince Mohammed bin Salman. King Salman also fired several high-profile ministers.

The new agency will “preserve public money, punish corrupt people and those who exploit their positions,” the Saudi Press Agency said.

While the sweeping crackdown spread panic through the Saudi establishment, the market for oil, Saudi Arabia’s biggest export, is unlikely to be affected, analyst Aleksey Korenev of Russian investment brokerage Finam told RIA Novosti.

“Decisions to reduce oil production or military-political tensions between the Saudis and neighboring countries have the most influence on the financial markets and the oil market. It happens periodically: either they can’t come to an agreement with Iraqi or with Syria,” Korenev said.

Alexander Razuvaev, director of the analytical department at currency brokerage Alpari, said that any reaction to the news by the oil market or financial markets would be short-lived, given that Saudi Arabia is unlikely to withdraw support for agreements between OPEC and other oil producers which reduced production and raised prices.

“There isn’t likely to be any real reaction on the world markets, all that might happen is some small volatility on the local stock market.” The indexes might drop, but this will only be a short-term event,” Razuvaev said.

In late October, the price of the industry standard Brent crude moved above $60 per barrel for the first time in more than two years. On Friday, the price increased to $62.07, recouping a loss earlier in the week to finish 2.7% higher than the previous week.

​Saudi Arabia is also motivated to keep oil prices higher because of its planned IPO of national oil giant Saudi Aramco. Last week, Saudi Crown Prince Mohammed bin Salman told Reuters that the IPO, which is set to be the biggest ever, is planned for 2018.

Sputnik



4 Comments on "Oil Price Expected to Remain Steady Despite Shock Arrests in Saudi Arabia"

  1. Sissyfuss on Sun, 5th Nov 2017 10:24 pm 

    The Saudis arrest their billionaires, we make ours president.

  2. onlooker on Mon, 6th Nov 2017 7:16 am 

    Well, here it is from my perspective what is happening in KSA. The Royals Sheikhs are literally in a fight for their lives. They have their awaited IPO to raise needed funds for their now faltering Oil Industry. They have a tradition of corruption heightened now by the sense of doom felt by all those within KSA. So the billionaires and officials are having internal conflicts as is natural when the situation is becoming dire and every man to himself. So the Billionaires are circling like vultures trying to get a piece of the meat of the carcass before it becomes a hollow hull. Thus the arrests. You have a native population grown indolent and entitled by the largess of the Govt. What happens when the generosity ends? And the pent up angers releases for the years of hypocrisy and lavish lifestyles these Royals have lived. Oh and their main benefactor and ally the US and its currency is also showing considerable weakness
    You also have the external situation of insurgents everywhere propped up by Iran who is the champion of the predominantly Shia population instigating for revolt against their Sunni overlords. And the insurgents wanting nothing less than a true Islamic Republic right smack in holy land for Muslims.
    So yes, I would say it truly is literally a fight for the lives.

  3. Anonymous on Mon, 6th Nov 2017 7:56 am 

    These machinations within the Royal Family are not new. First the system has always been a little fluid, without the strict primogeniture of European monarchs. A King was deposed in the 1960s and another assassinated in the 1970s.

    As far as corruption, sure. But that is how the state has normally functioned. And the corruption is an excuse for consolidating power. Not the power consolidation being done because it is needed to address corruption. In past days the most transparent lies have been used for changing the order of succession.

    I don’t know if I am for it or against it, really. We are talking about a bunch of desert emirs really. Who knows maybe the new system will be more stable.

    I can’t get exercised in defense of the ousted clans or in favor of the ousting clan. It is a situation to watch.

  4. malahmadi on Mon, 6th Nov 2017 11:00 pm 

    What do you mean by consolidation of power? MBS is the crown prince and his father is the king. What more consolidation is needed?

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