Quotation: "As OPEC prepares to meet, a fast-changing energy mix raises questions about the future of oil markets"
Published in the Financial Post
“The important question from Saudi Arabia’s perspective, and from every producer’s perspective, is what is the future trajectory of prices compared to the present,” says Omar Al-Ubaydli, a director for the Bahrain Center for Strategic, International and Energy Studies.
“Given that they think oil prices are going to be lower in the future — because of electric cars, because governments want to do more to cut emissions and that kind of thing — it makes sense to try to sell as much as they can now.”
Published in MarketWatch
Omar Al-Ubaydli, a program director at the Bahrain Center for Strategic, International and Energy Studies, referred to the output cap speculation as a “red herring.”
Everyone is producing as much as they can or want to produce anyway, “so an output freeze is equivalent to all the runners in the 100-meter final saying: ‘Let’s agree to not run faster than 9 seconds’.”
“In that case, they just want to project collective power,” said Al-Ubaydli, who’s also an affiliated senior research fellow at the Mercatus Center at George Mason University.
Some producers may intend to exhibit “willful production restraint,” but an agreement would “unravel within days or weeks since there is no reliable way to monitor cheaters and everyone has a history of cheating,” he said, adding that OPEC had a 96% output quota violation rate from 1980 to 2009.
Published in Al Arabiya English
Omar al-Ubaydli, an economist and director at the Center for Strategic International and Energy Studies in Bahrain, Saudi’s island neighbor, sees Saudi’s new seat on Uber’s board as a key factor of the deal.
The seat will be occupied by Rumayyan, the Saudi wealth fund’s managing director, who since February last year has also served as an advisor to the royal court.
“Expect Saudi Arabia to benefit from the business experience gained via the board seat to help it launch its own sharing apps tailored to the unique needs of the Saudi economy,” added Ubaydli.
Published in Bloomberg View
But then I talked to Omar Al-Ubaydli, an economist and program director at the Bahrain Center for Strategic, International and Energy Studies and a research fellow at the Mercatus Center in Virginia. He pointed out that while $3.5 billion is a lot of money for us, and for Uber, it’s almost pocket change for the Saudi government. He sees this as an investment in moving the Saudi economy beyond oil -- a well-documented priority.
“The gulf economies are very strange,” says Al-Ubaydli, himself a Bahraini national. He suggests that putting money into Uber, and taking a board seat, gives them a leg up at building a stronger private sector through similar decentralized applications, allowing Saudis -- particularly women, who are less mobile for cultural and legal reasons -- to begin to move the country beyond its dependence on oil revenue.
It's an odd thought, trying to build up the private sector with a targeted investment from the state wealth manager. But given the strange nature of gulf economies, there’s little alternative.
“The normal principles you’re used to deploying in a traditional economy don’t work," Al-Ubaydli says. "I agree it’s a bit ironic, but trying to shift an economy that’s so dependent on oil, you have to think outside of the box.”
Published in Fox Business
“This is a good opportunity to overcome some internal political opposition that would exist if they tried to introduce economic reforms. When there are high prices, it’s difficult to convince local stakeholders to change the way the economy starts up, but with low prices now…this is time to introduce reforms,”
Al-Ubaydli continued by saying it’s simply a coincidence that an oil-minister regime change came about at the same time the nation looks to enact a change in economic policies. Continue
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