Time: October 08, 2018
Over the past year, Crown Prince Mohammed bin Salman has given a number of interviews with international media to explain the changes happening in the Kingdom. One of the most viewed was an interview last March with the CBS news program, “60 Minutes.” This was his first interview with an American television network.
On Friday, he gave an interview to journalists from Bloomberg News. It came at a critical time for Saudi Arabia. Despite the Kingdom witnessing unprecedented economic movement, it seems that some critics are working to fulfill an agenda attempting to show that Saudi Arabia is failing in the great national economic reforms put forward by Saudi Vision 2030. These critics repeatedly question whether the Kingdom can meet its stated goals. Such attempts are deliberate attacks that aim to sow doubt about Saudi prosperity and the potential of the Kingdom’s young population to thrive.
In the Bloomberg interview, the crown prince emphasized that Saudi Arabia and the US have both maintained a baseline of economic and security cooperation that has kept ties between them strong. Even during the final years of the Obama administration when relations between the two nations underwent a period of differences, Saudi Arabia and the US were still steadfast allies. Under the Trump administration, relations have warmed and the US continues to fully support Saudi Arabia in its regional role.
The Trump administration has acknowledged that Saudi Arabia is a crucial US strategic partner. Their strong relationship is essential in maintaining stability in the Middle East and economic security worldwide. Such mutual regard bodes well for the Kingdom’s future partnerships with the US and nations worldwide.
Saudi-US business ties remain solid. There are still massive exchanges in trade and value-added services. Now the economic relationship is evolving to focus less on dependency and more on mutual cooperation. In the Bloomberg interview, the crown prince highlighted that under new agreements, Saudi Arabia will purchase armaments from the US, but that part of those armaments will be manufactured in the Kingdom.
Under Trump, relations have warmed and the US continues to fully support Saudi Arabia.
The crown prince also clarified that Saudi Arabia, OPEC and its partners have kept their promise to supply oil to the market to make up for any loss of crude from Iran. In fact, while Iran’s exports have been reduced by 700,000 barrels per day, Saudi Arabia, OPEC and non-OPEC nations have stepped in and supplied 1.5 million barrels of oil per day. That is more than double any loss from Iran. He emphasized that slightly higher oil prices are due to issues in Canada, Mexico, Libya and Venezuela. Prince Mohammed mentioned that the Kingdom alone still has spare capacity of 1.3 million barrels per day if required.
The interview covered the topic of negotiations with the Kuwaitis in regards to reactivating oil production in the neutral zone, which Saudi Arabia shares with Kuwait. The crown prince is keen to resume oil output from these fields in an answer to global oil demand for the medium, sour crudes of this type which are facing supply shortages. According to Prince Mohammed, the Saudi government is “trying to convince the Kuwaitis to talk about the sovereignty issues, while continuing to produce.”
In a major piece of economic news, the crown prince cleared up confusion regarding the sale of SABIC shares and the Saudi Aramco IPO in “late 2020, early 2021.” As for criticisms that not all targets had been met, the crown prince commented that the goals had been very high to stimulate people to work hard. If the targets had been partially met, that was better than achieving nothing. If it was necessary to revise plans, so be it. The path forward is not always a straight line and it is a major challenge to move the “morale” of the people. It is certain that spiteful, inaccurate criticism from international media is unhelpful.
Prince Mohammed addressed many controversial subjects and answered Bloomberg journalists’ questions with remedies to kill all rumors and end any misleading stories. Keep in mind that Bloomberg itself was one of the instigators of the controversy about lowering the valuation of Saudi Aramco upon reporting an irrelevant, unfair assessment. The crown prince was clear when he stated that Saudi Aramco is worth at least two trillion dollars.
Speaking of the transparency that Saudi Arabia adopted along with Saudi Vision 2030, the Crown Prince acknowledge that the unemployment rate must be reduced to seven percent by 2030. Without a doubt this illustrates that we’ve passed the stage of denying our own issues and have moved to addressing those issues for an ultimate resolution.
- Faisal Mrza is an energy and oil market adviser. He was formerly with OPEC and Saudi Aramco. Reach him on Twitter: @faisalmrza