One of the secret elements of the deal signed last year is that China will invest US$280 billion in developing Iran’s oil, gas, and petrochemicals sectors. This amount will be front-loaded into the first five-year period of the new 25-year deal, and the understanding is that further amounts will be available in each subsequent five year period, provided that both parties agree.
Supreme Leader Ali Khamenei is now 81-years old. While his health remains a closely guarded secret, his past medical history, age, and the deaths in recent years of other senior leaders have led Iranians to start considering what a post-Khamenei Islamic Republic might look like. There are two main contenders to succeed Khamenei: his 51-year-old son, Mojtaba, and Judiciary Chief Ebrahim Raisi.
The era of Saudi Crown Prince Mohammad bin Salman, launched with the promise of largesse, is now likely to go down in history as a period of unprecedented belt-tightening. The 34-year-old known as MBS, already set on reducing his kingdom’s dependence on oil, has now found the insurance offered by the precious commodity pulled out from under his feet.
In the two decades since rising to the top of the Kremlin, Putin has consolidated power and strengthened Russia’s role on the world stage. Many of these changes, which have come at no small cost, would have been unfathomable at the turn of the century; Putin’s election marked the country’s first democratic change of power. With Moscow now paving the way for Putin to rule until 2036, one of the world’s most powerful leaders may well become one of the world’s longest-serving.
The historic crash in oil prices in the wake of the coronavirus pandemic is reverberating across the Middle East as crude-dependent countries scramble to offset losses from a key source of state revenue — and all this at a time when several of them already face explosive social unrest.
By unsheathing the oil weapon, the Saudis have finally tested the patience of oil-patch Republicans, who have long been among their staunchest supporters in Congress. Even though the United States, Saudi Arabia, Russia, and other big oil producers reached a deal this month meant to curtail oil output and undo some of the damage, it hasn’t worked: U.S. crude oil prices are at their lowest levels of the 21st century, threatening mass bankruptcies and layoffs in the United States.
During normal times, if the world’s petroleum producers announced an agreement to slash output, oil prices would immediately spike. During normal times, lower crude prices would boost economic growth. During normal times, low oil prices might be reason to celebrate. But if there is one fact we can agree on, it is that these are not normal times.
The global economic consequences of COVID-19 would inevitably slow Russian economic growth. A prolonged collapse in oil prices would almost certainly push the economy into recession. Putin’s promises evaporated. In these circumstances, Putin needs to raise and stabilize oil prices. The question was how to do that without appearing to yield to Saudi or American pressure.
Despite the obvious public health benefits of suspending the umrah and hajj, Saudi Arabia will pay a heavy cost for its prudence. Pilgrims bring in billions of dollars to the country every year, so the Saudi economy will suffer as long as the crisis lasts. Another loss is less quantifiable, but just as significant: pilgrimage remains one of the kingdom’s most important soft-power instruments after two decades during which its public image has deteriorated.
Global oil markets received the price war truce they had long sought, but hopes for a significant and sustained rebound in prices are still likely misplaced. OPEC+, the group of oil producers led by Russia and Saudi Arabia, respectively the world’s second and third largest crude producers and top two exporters, reached a tentative agreement to trim oil production by 10 million barrels per day (bpd) to help ease the economic impact of the coronavirus crisis on global demand.
