Saudi Arabia reduces oil prices for Europe, perhaps to undercut Iran
Published 2016-01-06 09:19:15| Amwal Al Ghad English
Saudi Arabia on Tuesday sharply cut the prices it charges for crude oil in Europe, a move that could undercut Iran as sectarian tensions escalate between the rival Middle Eastern nations. The Saudi move appears to pave the way for a competition over European oil markets later this year when Iran is expected to increase its exports after the expected end of western sanctions over its nuclear program. Italy and Spain relied on Iran for 13% and 16% of their oil imports before the European Union banned such purchases under sanctions related to its nuclear program in 2012. Although the country was replaced in the market by Saudi Arabia and other countries such as Russia, Tehran is counting on rekindling those ties when it resumes exports. The price cut comes after a diplomatic chasm opened this week between Saudi Arabia and Iran, and by extension, the Sunni and Shiite Muslim worlds. Riyadh and a number of Sunni Muslim capitals have severed or downgraded diplomatic ties with Iran after the Saudi embassy was set on fire in Tehran following the execution in Saudi Arabia of Shiite cleric Nemer al-Nemer.
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Get To Know
Ali Abdel-Al, 68, is an Ain Shams University constitutional law emeritus professor who won a seat in an Upper Egypt governorate as part of the Pro-Egyptian State Coalition, which at the time was named the For the Love of Egypt list. Abdel-Al was also at the top of a committee responsible for drafting three election laws in 2015; the exercise of political rights, the House of Representatives affairs, and the division of electoral constituencies. He has said several times that he is highly supportive of President Abdel Fattah al-Sisi. When he visited parliament for the first time after winning a seat in the first round of the polls last October, he told reporters that the relationship between the parliament and the president of the republic should be based on "cooperation rather than confrontation". Abdel-Al first came to prominence when former interim president Adli Mansour selected him in 2013 to be one of a 10-member committee entrusted with handing a draft of Egypt's new constitution to a wider 50-member body for review. President Sisi selected Abdel-Al as a member of the legislative reform committee that took charge of vetting important political and economic legislation. Officials affiliated with the pro-Sisi parliamentary bloc entitled Support Egypt were quick to announce that as long as former interim president Mansour – the head of Egypt's Supreme Constitutional Court – was not appointed by Sisi to parliament, they would back the nomination of Abdel-Al for the post of speaker. Article 117 of the new constitution states that the speaker and two deputies cannot be elected for more than two consecutive legislative seasons. Article 160 states that if the president is temporarily not able to exercise his powers, the prime minister will act in his place. However, if the president's office becomes vacant due to his resignation, death or a permanent inability to work, the speaker of parliament shall temporarily assume the powers of the president. A new president should be elected within 90 days. The last speaker of the previous house of parliament, which was dissolved in June 2012 by a court order on constitutional grounds, is the now-imprisoned leading Muslim Brotherhood member Saad El-Katatni. El-Katatni is appealing a death sentence over charges of damaging and setting fire to prison buildings, murder, attempted murder, looting prison weapons depots and releasing prisoners while escaping from Wadi El-Natroun prison during the January 2011 revolution. During the Mubarak-era, law professor Ahmed Fathi Sorour served as speaker from 1990 until the January 2011 revolution.
Oil prices ended the week lower in choppy trading on Friday, snapping two weeks of gains, as a frenzy of speculation about a possible deal between top oil producers clashed with concerns about a growing supply glut. After a volatile week's trading, much is riding on Sunday's meeting between Venezuelan Oil Minister Eulogio Del Pino and his Saudi counterpart Ali al-Naimi in Riyadh, after Del Pino's discussions with the Qatari and Omani ministers this week. As cash-strapped Venezuela tries to rally support for concerted action between members of the Organization of the Petroleum Exporting Countries to boost prices, Sunday's meeting is seen "make or break" for a possible deal, said Tim Evans, energy futures specialist at Citi Futures. Adding to this week's rollercoaster ride in prices was the sudden liquidation of a $600 million leveraged fund bet on falling prices. Investors were also weighing a string of conflicting indicators on Friday as the dollar .DXY recovered some of the ground lost over the past two days while investors continued to fret about growing oversupply, with U.S. inventories hitting record highs last week amid concerns about a slowing global economy. The pickup in the market earlier this week was not really warranted, Gene McGillian, senior analyst at Tradition Energy said, referring to the market seemingly brushing aside extremely bearish inventory data earlier this week. [EIA/S] "Today when the dollar tried to push up, which I attribute mostly to a little weekend covering, you started to see some sellers come back in the oil markets," he said.
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