The end of the Gulf Co-operation Council?

The crisis pitting Saudi Arabia and the UAE against Qatar is the most serious turbulence to afflict the Gulf Co-operation Council (GCC) bloc since what is now called ‘the First Gulf War’, when non-member Iraq briefly invaded and occupied member state Kuwait.

The major difference between today’s crisis and those dramas, of course, is that there is no military dimension now, and no military escalation is to be expected. But the political fallout is massive.

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Saudi-Russian deal — more politics than oil

An agreement signed by Saudi Arabia’s oil minister Ali Naimi and his Russian counterpart Alexander Novak in St Petersburg last week created the fleeting impression that Saudi Arabia had convinced Russia to co-operate with Opec to defend prices.

Naimi himself has said that the participation of non-Opec producers such as Russia and Mexico would be a pre-condition for resuming a strategy of defending oil prices through output constraint, and abandoning the new Opec strategy of defending market share. Back in March, he said: “Because it is a common interest, everyone should participate if we want to improve prices, because it is not right for one party to gain at the expense of the other.”

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Reading the tea leaves in Riyadh

Speculation that state-owned Saudi Aramco and the country’s oil ministry are to be “separated” is misleading. It stems from a 30 April news report on privately owned Saudi TV channel al-Arabiya, which is close to the new deputy Saudi crown prince Mohammad bin Salman, and it has been widely assumed that he or his office was the source of the story.

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The great survivor holds on

Saudi Arabia’s veteran oil minister Ali Naimi — the great survivor of the oil industry — has just survived the country’s greatest power shake-up. King Salman’s decision to name his 55-year-old nephew, Mohammad bin Nayef, as his successor, instead of his half-brother Miqrin, cements the steps Salman took when he assumed the throne in January, moving the line of succession away from the remaining ageing sons of founder king Abdel-Aziz to the younger third generation of al-Saud princes.

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More palatable Iraqi terms possible

Lower oil prices have hit Iraq much harder than the core Mideast Gulf producers.

Although Iraq is almost a Mideast Gulf country geographically, and although it enjoys abundant reserves that are relatively cheap to produce, lower crude prices are hitting its capacity development plans in a big way. But lower prices that are a bane to Iraq could turn out to be a boon to the foreign companies developing its nine largest fields.

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