“[Saudi Arabia’s] experience with MERS uniquely positioned them because they learned a lot from that….They know it’s MERS season and they’re already cued up for that. The preparation and processes … really cuts down on your exposure right away.”
-Joanna Gaines, U.S. Centers for Disease Control and Prevention (CDC), which for years has supplied the Saudi health ministry with its only full-time foreign disease expert. Saudi Arabia took drastic measures early on to contain the new pandemic, and the WHO has said Saudi Arabia’s “whole of government” approach had benefited from the MERS experience and “unique expertise” in emergency preparedness from managing the haj pilgrimage. [reuters.com]
“Analysts have called the breakdown of Opec+ and the lifting of the supply cuts that kept the oil market balanced in the last two years anything from a spectacular blunder to collective suicide. A new model of the oil market led by the inventors of mean-field game theory, Fields Medal laureate Pierre-Louis Lions and Jean Michel Lasry, suggests otherwise. The sell-off will hurt producers all around but will bring Riyadh and Moscow longer-term benefits. With their low costs and vast financial reserves, the two can withstand a loss of oil revenue better than most producers. Others are already teetering on the brink of collapse. Sanctions-hit Iran is a case in point. The real prize for Opec however is the taming of shale oil. It suddenly looks within reach. Long an Opec critic, the US is turning into an unlikely cheerleader.”
-Antoine Halff, chief analyst at Kayrros and a research scholar at Columbia University’s Center on Global Energy Policy, writing in the Financial Times. [ft.com]
“Of the world’s three largest oil producers, Russia has the least amount of available storage capacity at about eight days, IHS said. Those figures are based on the amount of production that could be stored if exports dried up. Saudi Arabia has 18 days, and the U.S. has 30.”
-Alex Longley, Bloomberg reporter, on the rapidly diminishing storage capacity for oil. IHS Markit notes that with inventories increasing by 1.8 billion barrels and only an estimated 1.6 billion barrels of capacity, storage could run out in three months. [Bloomberg]
“The aim of the clip was to make citizens and residents aware of hazards of the coronavirus and to comply with arrangements and instructions of the Health Ministry.”
-Nasser Ali Al Shahrani, a Saudi doctor, who appeared in a viral video refusing to hug his child for fear of transmitting the coronavirus to him. The doctor said the video was aimed at raising public awareness about the highly infectious disease. [gulfnews.com]
“…[S]harp spikes in global risk aversion and the flight of capital to safe assets have led to a decline in portfolio flows to the region by near $2 billion since mid-February, with sizable outflows observed in recent weeks.”
-Jihad Azour, writing on the IMF’s website, enumerates many of the shocks from the COVID-19 pandemic and trade collapse in the Middle East and Central Asia. Capital flight is one of many unseen and secondary issues that will have ongoing consequences for states in the region. [IMF]
“On top of the looming public health crisis is a massive fiscal crisis… There is not a country in the region that will not feel dire effects, and many of the ones that will feel the most severe ones are important to U.S. security.”
-Jon B. Alterman, Director of the Middle East Program at the Center for Strategic and International Studies, assesses the multitude of threats currently facing the Middle East. [The Hill]
“We have huge reserves and very large investments, but we don’t want to liquidate any of these so we will borrow… I don’t expect the deficit by the end of 2020 to exceed 7 percent to 9 percent, and this is our target.”
-Saudi Minister of Finance Mohammed Al-Jadaan discussing the government’s budget plans in a broadcast on Saudi state TV. [Zawya]
“Our goal was to achieve the best interests of the students, and not to stop their educational journey for one day.”
-Saudi Education Minister Dr. Hamad bin Mohammed Al-Asheikh, accompanied by Commerce Minister Dr. Majid Al-Qasabi, in comments while touring the production center for the virtual school in Riyadh on Sunday, “which is serving more than 6 million distance learning students throughout the Kingdom during the period of the suspension of regular education.” [Arab News]
“We are living through a difficult period in the history of the world, but we are fully aware that it will pass despite its cruelty, bitterness and difficulty.”
-King Salman, in a public speech on Thursday as Saudi Arabia announced a $32 billion package to mitigate the economic and commercial costs of the Covid-19 crisis. Saudi Arabia has taken severe measures already including suspending international and domestic flights, Umrah pilgramage, closing mosques, schools, malls and restaurants, and asking people to stop going to work. [Reuters]
“Extensive pain from the oil price shock will accumulate over the course of 2020 and create the necessary conditions for negotiations, compromise, and probably a new production restraint agreement… but [Saudi Arabia’s] long term objective is to be the predominant market manager and price setter.”
-Risk consultancy The Eurasia Group in a research note. The group believes the price war between Riyadh and Moscow is likely to last throughout 2020. [cnbc.com]
