News

Saudi weekly digest. XXVII

Ending last week, U.S. President Joe Biden stated that a normalisation agreement between Israel and Saudi Arabia, which would involve a defence treaty and a U.S.-backed civilian nuclear program, is still far from being finalised.

But there is more to last week.

In commodities, we trust

Saudi Arabia and Russia, the world's leading oil exporters, have increased their oil cuts, driving up prices despite global economic slowdown concerns and potential U.S. Federal Reserve interest rate hikes. Saudi Arabia will continue its voluntary oil output cut of one million barrels per day into August. Russia will reduce its oil exports by 500,000 barrels per day in the same month. These cuts, representing 1.5% of the global supply, increase the total cuts pledged by OPEC+ to 5.16 million barrels daily.

Saudi Arabia and Kuwait have asserted their joint ownership rights to the Dorra gas field, known as Arash in Iran, pushing back against Iran's claims. The declaration comes after Iran announced preparations to start drilling in the disputed field.

Business and Economy

Saudi Arabia's non-oil business sector saw significant growth in June, primarily fueled by the tourism and construction industries. The latest report from Riyad Bank shows that Saudi Arabia's Purchasing Managers' Index (PMI) increased to 59.6 in June, slightly from 58.5 in May but just below the eight-year record of 59.8 in February.

Saudi Arabia is set to launch a multibillion-dollar sports investment company, part of its $650bn sovereign wealth fund, as it expands its position in sports and entertainment. This move is seen as a part of a broader effort to diversify the kingdom's economy away from oil and reshape its social codes.

Lastly, some recognition and long-awaited developments

The Global A.I. Index, a UK-based Tortoise Media report assessing more than 60 countries, has placed Saudi Arabia at the top of the list in the "government strategy" category. The index evaluates over 100 indicators across seven key areas: government strategy, research, development, talent, infrastructure, operating environment, and commercial.

Amidst failing peace negotiations with the Houthi militia, Saudi Arabia is reportedly preparing to exit the costly war in Yemen. Establishing Saudi-backed administrative councils in Yemen could facilitate consensus-building among southern factions, aiding the Saudi-led coalition's exit strategy.

Some E2E thoughts

The name East2East Views is inspired by geography. From one East to another. In the case of this platform, the one East, where this platform operates, is Eastern Europe and the other East is the Middle East.

Having said that, it's exciting to see The Saudi Ambassador to Finland, Nesreen Hamad Al-Shebel, officially take on the role of non-resident ambassador to Estonia.

She presented her credentials to Alar Karis, the president of Estonia and the two discussed ways to enhance relations between their countries.

In addition, just a little while back, Alar Karis, the President of Estonia, sat down for a chat with Arab News.

Regarding the Saudi-Israeli normalisation, the opening report in this post by President Joe Biden eases the speculation of the normalisation agreement's soon arrival. This report contrasts the eager prospects expressed in the previous E2E analytical piece. However, as the dynamics of Middle Eastern politics continue to evolve, it is crucial to be open to the possibility of new key players entering the field.

Recently, China has surfaced as an unforeseen mediator in the region, working to reconcile diplomatic ties between Saudi Arabia and Iran. Considering this new dynamic, it's plausible that parties other than the U.S. could be instrumental in orchestrating such historic agreements. Speaking of China, it has, over the years, offered to mediate between Israel and Palestine and at the time of writing this, the Israeli Prime Minister is planning a trip to China. Those familiar with Middle Eastern affairs are well aware of Benjamin Netanyahu's dedication and enthusiasm for realising Saudi-Israeli normalization.

Given China's recent successes on the diplomatic front and Netanyahu's upcoming trip to China, the possibility of China acting as a mediator between Saudi Arabia and Israel should not be ruled out. While the aforementioned is highly speculative, the thought follows recent regional developments. After all, the world is moving away from unipolarity to a multipolar order.

Let's keep an eye on that...