TIME Saudi Arabia

Prince Charles Will Raise Plight of Christians During Saudi Arabia Visit

Prince Charles visits Zaatari refugee camp in Jordan, Feb. 8, 2015.
Sam Tarling—Corbis Prince Charles visits Zaatari refugee camp in Jordan, Feb. 8, 2015.

The Prince of Wales is also likely to ask for clemency for a jailed Saudi blogger and two women arrested for driving

Prince Charles has spent much of his adult life feeling he can’t win. He’s often criticized for doing too much, “meddling” in issues of the day, yet his opponents are just as apt to accuse him of doing nothing useful at all. On Tuesday these apparently contradictory responses to the heir to the throne of the United Kingdom will crackle across the headlines and flare into scornful tweets and posts as he arrives in Saudi Arabia on a trip that has already taken in Jordan, moved on to Kuwait and will also include Qatar and the United Arab Emirates. His frequent sojourns in the Middle East rarely fail to spark controversy, and his visit to Saudi Arabia could scarcely come at a more delicate time.

The Kingdom, unlike his own, is grappling with the upheaval caused by the transition from a long-reigning monarch to a newcomer. King Salman has succeeded to the throne vacated by the Jan. 23 death of his older half-brother King Abdullah and is already rolling back some of the cautious reforms Abdullah implemented. The nation also sits at the center of the interlocking crises gripping the Middle East. It is both a wellspring of jihadism and a crucial bulwark against the march of Islamic State in Iraq and Syria and other militant groups. But it is Saudi Arabia’s record on human rights and freedoms that is likely to play loudest for the Prince. Two cases, in particular, are causing outrage: Raif Badawi, a Saudi blogger, who has been sentenced to 10 years in prison and 1,000 lashes for championing free speech in postings such as these, and Loujain al-Hathloul and Maysa al-Amoudi, two women sitting in Saudi jails, originally detained for the offense under Saudi law of driving a car despite the accident of birth that made them female.

A similarly random accident of birth gives Prince Charles a platform and an influence among the upper tiers of the Saudi establishment. Royals feel comfortable with royals. Yet that’s not the only reason the Prince has become, in the words of an official from Britain’s Foreign and Commonwealth Office, “a huge asset” to British diplomacy in Saudi Arabia and other Gulf states. He has assiduously been building on that innate advantage since 1993, when he delivered a speech just before embarking on a trip to Saudi Arabia. His words — startling at the time in their acknowledgment of Christianity’s own muddy history and his call for closer ties between Islam and the West — established his status as a friend of Islam; elsewhere it sowed silly rumors that still flourish in corners of the Internet, holding him to be a secret Muslim.

He has continued to reprise some of the themes of that first speech, most recently in a BBC interview just before his current travels during which he did his best to argue for religious faith as a unifying force rather than a divisive one. That view is pretty hard to marry up with the violent fractures in the region he is now touring, but it is to him an article of his own faith. That faith, despite the rumors, is Church of England Anglicanism but the Prince also believes in the common roots of religion and the interconnectedness of much more besides. “Islam — like Buddhism and Hinduism — refuses to separate man and nature, religion and science, mind and matter, and has preserved a metaphysical and unified view of ourselves and the world around us,” he told his audience in his 1993 speech on Islam.

For all these reasons, his Saudi hosts will treat him with the highest respect when he comes calling. That may well mean more photo opportunities that rebound against him, such as his participation last year in a traditional sword dance that inspired predictably scathing responses on social media

What is far less certain is that he will be able to intervene successfully on behalf of Badawi, al-Hathloul or al-Amoudi, though he is likely to use his high-level meetings to communicate the anxiety of Her Majesty’s Government about their plight. He will also raise concerns about the suffering of Christian communities in the Middle East, as he has done before and with increasing urgency as the turmoil in the region has deepened. He may have the ear of Saudi royalty but little or no sway over the country’s judiciary or its religious leaders, who operate in uneasy and fragile balance with the Saudi monarchy but are not under its control.

The imagery from his trip will not reflect these realities, producing instead a series of vignettes of a monarch-in-waiting cosying up to fellow royals, lending support rather than issuing challenges to the harsh regime. The role the Prince has carved out for himself in the region relies on him wielding such influence as he does have in private.

Catherine Mayer’s biography, Born to Be King: Prince Charles on Planet Windsor, is published in the U.S. on Feb. 17 by Henry Holt.

TIME Economy

5 Plunging Numbers That Explain the World This Week

Greek Prime Minister Alexis Tsipras looks on before swearing in ceremony of the new deputies that were elected in the January 25 national polls, in Athens, Feb. 5,2015.
Yannis Behrakis—EPA Greek Prime Minister Alexis Tsipras in Athens, Feb. 5,2015.

From Greek bond rates to Indonesian approval numbers, these figures tell the story of an unstable world

With spiraling oil prices, crumbling economies, weakened leaders, and intensifying violence in Ukraine and the Middle East, we’re experiencing unusual volatility in markets and geopolitics. Here are five falling numbers that have broad-reaching implications.

1. Down to 1.38%

There’s a huge difference between the current Greek crisis and previous cycles of panic: today bond markets are treating the Greek economy as an isolated patient, swatting away notions of contagion risk to other periphery countries. The numbers tell the story. In the wake of the anti-austerity party Syriza’s victory in Greek elections last month, Spain’s 10-year yield fell to new record-breaking lows, closing at a staggering 1.38% at one point last week. That means Spain can borrow at better rates than the thriving United States. Compare that to Greece’s 10-year yield, which shot above 11% in the days after Syriza took office.

(Source: Eurasia Group, Bloomberg Business: Spain, Greece)

2. -30% Approval

Expectations for Indonesia’s new president Joko Widodo were sky-high when he was elected last summer. (He even graced the cover of this publication in October with the headline “A New Hope.”) But his recent nominee for police chief is a former aide to party powerbroker and ex-president Megawati Sukarnoputri, raising concerns about her influence over the supposedly independent Joko. Just days after the announcement, police chief nominee was named as a suspect in a corruption probe. Joko’s decision to trim fuel subsidies in November was lauded by investors; after all, between 2009 and 2013, Indonesia spent more on such subsidies than it did on social welfare programs and infrastructure put together. But it’s no surprise that a hike in fuel prices didn’t go over as well with the general population. According to an opinion poll by LSI, Joko’s approval rating has dropped 30 points—from 72% in August to just 42% in January.

(Source: Wall Street Journal, The Economist, Financial Times)

3. -$58 per barrel

The price of Venezuelan oil collapsed from $96 in September to $38 last month. That’s not a good thing in a country where oil exports provide more than 95% of foreign exchange. Venezuela needs that hard currency—more than 70% of its consumer goods are imported. Things are getting bleaker. The International Monetary Fund predicts an economic contraction this year of as much as 7% of GDP. Inflation is over 60%. And an economic perk is coming under threat: Venezuelans enjoy the world’s cheapest gasoline, paying the heavily subsidized rate of roughly $0.06 per gallon. This provision costs the government more than $12 billion a year. In a recent speech, President Nicolas Maduro declared, “You can crucify me if you want, but there’s a need for us to go to a balanced price.” Given all the economic woes and the President’s tanking approval ratings, it’s definitely not the easiest time to rake back this subsidy.

(Brookings, New York Times, Wall Street Journal, Bloomberg, International Business Times)

4. -$500,000,000 in military aid

With ISIS rampaging across Iraq and Syria—and Houthi rebels seizing the capital of Yemen and pushing that country into civil war—Saudi Arabia is accelerating its plans to wall itself off from volatile neighbors. In September, the Saudis began construction on a 600-mile wall along the border with Iraq. To the south, they are strengthening fortifications to keep unwanted visitors from breaching the 1,060-mile border with Yemen. Border guards told a CNN correspondent that in just the last three months, they have stopped 42,000 people from crossing a 500-mile section of the border. It’s not just about security—it’s also economic. As of 2013, Saudi citizens represented just 43% of the country’s workers—and only some 15% of the private sector—with the rest consisting of foreign workers. With youth unemployment at around 40% in Yemen, many try to cross in search of work. But even as the spending spree on security continues, the Saudi Kingdom is halting most of its financial aid for Yemen, fearful it could fall into Houthi hands. According to a Yemeni official, the Saudis recently refused to pay $500 million earmarked for military aid.

(Newsweek, Reuters, Bloomberg, CNN, Al Arabiya News, Reuters, Wall Street Journal)

5. -$61,000,000,000 … and -16%

They’re the group of Russians best equipped to weather hard times, but that doesn’t mean they aren’t feeling the burn. In 2014, the 21 wealthiest people in Russia lost a combined $61 billion—a quarter of their net fortune. Those who aren’t losing money are removing it: 2014’s net outflows by companies and banks topped $150 billion. That’s more than double the 2013 figure, and shatters the old record from ’08, amidst the financial crisis. The IMF expects the Russian economy to contract 3.5% in 2015. At least Russians can express their dismay while drinking more affordable liquor: this week, Moscow passed a new measure cutting the minimum price of a bottle of vodka by 16%.

(Reuters, Businessweek, IMF, Washington Post)

 

TIME Saudi Arabia

Saudi Women Right-to-Drive Activists Deploy Twitter, Face Terrorism Court

Mideast Saudi Free Speech
Loujain al-Hathloul—AP A screenshot from a video released by Loujain al-Hathloul on Nov. 30, 2014, shows her driving towards the United Arab Emirates - Saudi Arabia border before her arrest on Dec. 1, 2014, in Saudi Arabia.

It has been nearly two weeks since Saudi Arabia lost King Abdullah, 90, whom his people affectionately labeled “The King of Humanity.” Since then, the notoriously slow-moving country has swiftly shifted gears. The new ruler, King Salman, 79, is the first Saudi King to have an official Twitter account and he addressed his citizens on social media. The Saudi history book is now being written live, 140 characters at a time. But while Saudi communications have moved into the 21st century, other traditions of the nation remain stuck in the past.

King Salman isn’t the only reason Saudi citizens have been glued to their Twitter feeds recently. Nearly two months ago, a determined Saudi woman with a valid driver’s license, Loujain Al Hathloul, 25, drove alone to the Saudi border from neighboring United Arab Emirates (UAE). Since women in Saudi Arabia are unable to drive in the country, the men working at the border confiscated her passport. She sat alone in her car, stranded yet defiant, and let her fingers do the talking. Although she objected to the men taking her passport, Al Hathloul praised them for their hard work. She tweeted how they offered her a 7UP soda, and showed a picture of the food and water bottles they bought for her.

Hours and dozens of tweets later, her UAE-based friend, Saudi journalist Maysaa Al Amoudi, 33, came with her own car to offer supplies to Al Hathloul—like a toothbrush—and support. It was cold and rainy, they each tweeted. At last count, Al Hathloul had 231K Twitter followers and Al Amoudi had 135K. At the time, Arabic hashtags of #LoujainBraveHeart and #LoujainAtTheBorder were trending on Twitter. After Al Hathloul had stayed at her car for a full day, and Al Amoudi for a few hours, tweets from both accounts abruptly stopped.

Al Amoudi did not intend to enter the country, sources say, but both women were taken into custody; Al Hathloul was taken to a juvenile center for girls and Al Amoudi was taken to the al-Ahsa Central Prison. Reports say that Al Amoudi has become ill during her stay, but no details have been released on her condition. It has been 67 days since the women were jailed.

When Saudi Arabia’s new King Salman went on state TV on Jan. 29th, citizens refreshed their smartphone feeds once again. As is the tradition when a new King steps into power, King Salman offered royal decrees. Along with generous salary bonuses and changing of ministers, he ordered the release of certain inmates currently held in Saudi jails. However, there were exceptions, including those jailed for speaking out against the government and human rights activists. Al Hathloul and Al Amoudi are still in jail.

The King’s nephew, Prince Mohammed bin Nayef, 55, who is the new deputy crown prince and second in line to the throne, is in charge of Al Hathloul and Al Amoudi’s case. A father of two daughters, Bin Nayef was educated in the U.S. and trained in counter-terrorism at both the FBI and Scotland Yard. His counter-terrorism training means the two women will be reportedly tried in the terrorism court, under a charge called “incitement to public disorder.”

Under the late King Abdullah’s rule (2005-2015), many changes happened for Saudi women. King Abdullah’s began a scholarship program in 2005 that allowed both men and women to pursue higher education at universities abroad without any personal cost. In 2011, the same year another female driver was jailed for defying the driving ban, King Abdullah made the monumental decree that Saudi women would be allowed into the Shura Council, which is the formal advisory board that proposes laws to the King. During that same year, the late King also said that women would be allowed to vote and run for office in the next elections, scheduled for 2015. Two Saudi women living outside of the Kingdom participated in the 2012 London Olympics for the first time ever. The athletes qualified at the last minute, after extreme pressure from outside entities, including Human Rights Watch. In 2013, the number of working women in Saudi Arabia reached almost 400,000, a four-fold increase in just three years, according to Labour Ministry figures. That same year, the Kingdom also saw its first ever Oscar-nominated director for the film Wajdja, written and directed by a Saudi woman, and the first feature film shot entirely in Saudi Arabia.

Despite the driving ban, there is no official law that prevents women from driving in the country. The Kingdom has been aiming to introduce public transportation to ease tensions. One such project is the King Abdullah Financial District (KAFD) Metro Station in Riyadh—designed by Iraqi-British architecture superstar (and woman!) Dame Zaha Hadid. Princess Nora bint Abdulrahman University, in Riyadh, the largest all-female university in the world, has its own driverless metro on campus where women can ride to class on their own.

The last few decades have seen a handful of different Saudi women go behind the wheel, each starting both their the engines and the conversation. For reaching for the car keys, many of these women were jailed, stripped of their jobs and shamed for stepping into the front seat of the car. But, despite the backlash, every few years, another woman tries to break the cycle.

Regardless of the efforts by the late King Abdullah to allow Saudi women to gain more rights and be more active in society, Al Hathloul and Al Amoudi were both jailed during his reign.

What is perhaps most surprising about the women driving movement is the support of fellow Saudi men. A parody video that went viral entitled “No Woman, No Drive,” was released on Oct. 26, 2013 to coincide with the Women2Drive campaign. One of the secondary performers in the video, wearing traditional Saudi attire, is Fahad AlButairi, a well-known Saudi stand-up comedian and actor.

AlButairi married Al Hathloul just five days before her arrest. His updated Twitter bio now reads: “Saudi stand-up comedian | Actor | Host of @LaYekthar | Member of @Telfaz11 | Proud husband of @LoujainHathloul.”

 

TIME Saudi Arabia

So This Saudi Prince Didn’t Actually Graduate From Lewis & Clark College

BAHRAIN-GCC-INTERIOR MINISTER
Mohammed Al-Shaikh—AFP/Getty Images Saudi Prince Mohammed bin Nayef in the Bahraini capital Manama on April 23, 2013.

The college corrected a statement by the Saudi Embassy

Saudi Arabia’s new deputy crown prince didn’t get a degree from Lewis & Clark College, the college said Friday, contradicting a statement last week by the Saudi Embassy.

The Saudi Embassy said this month that Prince Mohammed bin Nayef graduated from Lewis & Clark College in 1981, the Associated Press reports.

The college said in a statement that the prince completed coursework in the late 1970s but didn’t get a degree. The prince is “remembered fondly by our alumni, faculty, and staff,” the college said, adding it’s proud Nayef studied there.

The Saudi embassy said the error resulted from a mistranslation.

[AP]

TIME portfolio

Meet Saudi Arabia’s Special Security Forces

These forces don’t pull their punches

In March 2013, photographer Lynsey Addario, along with TIME‘s Africa Bureau Chief Aryn Baker, gained access to Saudi Arabia’s highly secure and secretive Special Security Forces’ training grounds. They witnessed how the elite soldiers’ intense exercise regimen has prepared them to face all forms of terrorism or threats in the Kingdom. Following the death of King Abdullah, Interior Minister Muhammad bin Nayef, who leads his country’s counterterrorism program and oversees these forces, was named Deputy Crown Prince of Saudi Arabia. He is now second-in-line to the throne.

Every country has its moment of reckoning. For Saudi Arabia, it was May 12, 2003, when heavily armed militants affiliated with al-Qaeda attacked residential compounds in Riyadh, killing 36, including nine Americans. That assault was just the beginning of a terror epidemic that unleashed car bombings, suicide attacks and targeted assassinations on a country that had known relative calm for nearly a decade. The number of attacks climaxed in 2004, when more than 60, including several foreigners, died throughout the country in a campaign of violence orchestrated by al-Qaeda militants bent on destroying the Saudi monarchy. The government responded by bolstering its Special Security Forces, crack anti-terror teams that work under the Ministry of Interior to root out terrorists in the Kingdom.

For three years, the Special Security Forces battled with militants in the country’s urban expanses, until the threat died down with the capture and killing of the al-Qaeda chief and hundreds of other militants in “pre-emptive” strikes in late 2006 and early 2007. Lessons learned from those early days now form the core of Saudi Arabia’s Special Security Forces curriculum. The forces, which number about 10,000, go through a rigorous training program designed to prepare soldiers for every possible contingency, from an attack on a VIP convoy to hostage search and recovery, bomb clearance, storming militant hideouts, pinpoint parachute landings, precision shooting and surveillance. In March 2013, TIME was granted rare access to a demonstration that put the newly trained recruits through their paces. “2003 to 2007 was a good lesson for us. The kind of training we have now reflects the new era of terrorism,” said Major Ahmad Hakimi, as he guided us through the purpose built facilities just outside Riyadh.

The facility boasts a massive, foam-covered and bullet proof shooting arena with adjustable housing configurations, to mimic urban house clearing. The adjoining warehouse features an entire airplane fuselage so commandos can practice combatting would-be hijackers. Outside recruits practice dropping from helicopters into fake compounds, in the style of the bin Laden capture. They climb up and rappel down water towers and practice hand-to-hand combat with designated “enemies.” They don’t pull their punches either—learning to take a gut punch is part of the training.

Basic military training lasts three months, followed by another month of basic security training and an additional specialization that can last for anything from two months to seven. There is a strong focus on explosives, and Hakimi seemed to take particular delight in having his visitors inadvertently set off pyrotechnic “bombs” triggered by every day objects, from the tab on a can of Pepsi to a doctored Koran or a small briefcase. None of the disguised bombs were invented, he explained. Militants had used each at one time or another in the Kingdom, to devastating effect. “It’s important to realize that anything has the potential to set off a bomb. We have to be aware,” he said.

Saudi society is strictly segregated along gender lines. Even when it comes to security issues, female police deal with women and male police, men. I asked if there were any women in counterterrorism training. Hakimi laughed, and pointed out that there would be no need in Saudi society. So what happens in the case of female terrorists? I asked. Hakimi, our voluble guide with an answer for everything, was momentarily stumped. “I guess,” he allowed, “we deal with terrorists as terrorists. It doesn’t matter when they are trying to harm our nation.”

Lynsey Addario, a frequent TIME contributor, is a photographer represented by Getty Images Reportage.

Michelle Molloy, who edited this photo essay, is a senior international photo editor at TIME.

TIME Michelle Obama

Michelle Obama Unveiled in Saudi: A Style Statement, Not a Political Statement

President Barack Obama and First Lady Michelle Obama participate in a delegation receiving line with new Saudi Arabian King, Salman bin Abdul Aziz, right, in Riyadh, Jan. 27, 2015.
Carolyn Kaster—AP President Barack Obama and First Lady Michelle Obama participate in a delegation receiving line with new Saudi Arabian King, Salman bin Abdul Aziz, right, in Riyadh, Jan. 27, 2015.

Correction appended Jan. 29

There is nothing quite as contentious as the headscarf issue when it comes to women’s rights in Saudi Arabia, at least where western observers are concerned. So when U.S. first lady Michelle Obama went to pay her respects after the death of Saudi King Abdullah in Riyadh with her hair uncovered, social media lit up with both praise and opprobrium. “Michelle Obama shouldve stayed in Airforce One as a sign of boycott rather than flouting rules of another country #Michelle_Obama_NotVeiled” tweeted @Random_Arora. “She was a guest in another country &culture. She should make no judgements, but show proper respect at a funeral.2 #Michelle_Obama_NotVeiled,” wrote @MonaBadah.

The thing is, Obama wasn’t really flouting any rules when she chose not to wear a headscarf. While foreign female visitors to the Kingdom are expected to wear long, loose fitting garments as a sign of respect — Obama obliged with a long coat over dark trousers — the headscarf is optional. The muttawa, or religious police, might growl menacingly, but there is nothing legally wrong with going uncovered for non-Muslims. Doing so may draw unwanted attention, and the ire of conservatives, but most Saudis treat the headscarf as a sign of piety, or at least feigned piety for public consumption.

When it comes to women’s rights in the kingdom, the headscarf is the least of any Saudi activist’s worries. She is more likely to be concerned about the right to drive, the right to vote, the right to keep her children after asking for divorce and the right to travel, marry and work without express permission from a male guardian. So maybe if Obama had driven to the funeral herself, it would have been worth a stir. Instead, she did as several other notable female visitors to the Kingdom, German Chancellor Angela Merkel and former U.S. Secretary of State Condoleezza Rice among them, have done before: dressing respectfully without compromising their own personal sense of style. It’s not like Mr. Obama decided to don a thobe and shemagh for the occasion.

Correction: The original version of this story mischaracterised Obama’s visit to Riyadh. It was to offer condolences for the Saudi King.

TIME Saudi Arabia

Saudi Arabia’s New King Refused to Intervene in a Controversial Beheading

Saudi Arabia's Crown Prince Salman Bin Abdulaziz Al Saud looks on during a meeting with China's President Xi Jinping at the Great Hall of the People in Beijing
Lintao Zhang—POOL/Reuters Saudi Arabia's King Salman looks on during a meeting at the Great Hall of the People in Beijing on March 13, 2014

An alleged rapist was executed Monday but many Saudis believe the case against him was shaky

A Saudi man accused of raping young girls was beheaded on Monday in the first execution under the administration of Saudi Arabia’s new King Salman.

Teacher Moussa al-Zahrani, 45, was beheaded in the western city of Jeddah, the Associated Press reports. The execution drew an unusual amount of debate on Saudi talk shows and social media, with citizens and relatives pointing out inconsistencies and gaps in evidence.

Al-Zahrani repeatedly maintained his innocence throughout his trial and appeals, and pleaded to the late Saudi King Abdullah to intervene in a video, which circulated widely in social media. The video featured al-Zahrani’s allegations that police framed him, eliciting a Twitter hashtag in Arabic “We are all Moussa al-Zahrani.”

However, King Salman, like his predecessor, chose not to intervene in the execution. Saudi Arabia continues to apply the death penalty to cases of rape, murder and other offenses according to the theocratic kingdom’s strict interpretation of Islamic law.

[AP]

TIME Morning Must Reads

Morning Must Reads: January 24

Capitol
Mark Wilson—Getty Images The early morning sun rises behind the US Capitol Building in Washington, DC.

Fuel’s Paradise

A majority of Americans are paying less than $2 per gallon for gas for the first time since 2009, and the ever-cheapening fuel is helping put more money in consumers’ pockets and bolster the economy

NASA Finds ‘Super Earths’

NASA’s Kepler Mission has found many planets in the “Goldilocks zone,” where it isn’t too hot or cold for water to exist

McDonald’s CEO Asks for Time

McDonald’s CEO Don Thompson cited a litany of actions the company is taking to reverse steep declines in sales

Federal Judge Strikes Down Gay-Marriage Ban in Alabama

A U.S. district judge ruled Friday in favor of two Mobile women who sued to challenge Alabama’s refusal to recognize their marriage performed in California. The judge said a state statute and 2006 amendment to the Alabama Constitution violated the U.S. Constitution

Big Storm Headed for the East Coast

A nor’easter could wreak havoc all along the East Coast this weekend, with a mix of rain and snow that will likely cause airline and traffic delays along the I-81 and I-95 corridors. Up to a foot of snow could accumulate in some locations

Obama to Cut Short India Trip to Visit Saudi Arabia

The schedule change, announced shortly before Obama left for India, means the president will skip plans to see the Taj Mahal, and instead pay a call on an influential U.S. ally in the volatile Mideast. Saudi Arabia’s King Abdullah died Friday at age 90

An Asteroid Will Fly Close to Earth on Monday

It doesn’t sound like a close shave, but in astronomical terms, it is. An asteroid will fly within 745,000 miles of Earth on Monday, NASA said, the closest a space rock will fly to Earth until 2027

Chicago Cubs Hall of Famer Ernie Banks Dies at 83

Ernie Banks, the Hall of Fame slugger and two-time MVP who always maintained his boundless enthusiasm for baseball despite decades of playing on miserable teams, died Friday night. He was 83

Emma Watson Launches New Anti-Sexism Initiative

Harry Potter star and U.N. Women Global Goodwill Ambassador Emma Watson unveiled the the HeForShe IMPACT initiative, a one-year pilot project geared toward advancing women by working with governments, companies and universities

Ebola Vaccines Get Tested in Liberia

The long-awaited vaccine for Ebola is heading to clinical trials in Liberia. Two vaccines, with the National Institutes of Health’s (NIH) support, will start efficacy testing in Liberia in the beginning of February

SkyMall Files for Bankruptcy

The parent company of in-flight shopping catalog SkyMall has filed for Chapter 11 bankruptcy, citing an increased prevalence of mobile devices on planes as the primary reason for the company’s flagging sales

Apple Store Chief Gets the Big Bucks

How much does Apple care about its retail stores? Enough to pay more than $70 million to the woman heading them up, making her the highest-paid exec at the company. Angela Ahrendts earned $73.4 million in 2014, almost all of it in stock awards

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TIME energy

New King In Saudi Arabia, Same Old Oil Policy

Whether it is Abdullah or Salman, the Saudi royal family’s preeminent concern is to ensure the longevity of its petrol kingdom

The death of Saudi Arabia’s King Abdullah made international headlines on January 22, raising questions about the future of the Middle East. News of his death briefly rattled the oil markets, but the media attention paid to the event outstrips the significance: it is business as usual in the Arabian Peninsula.

The outpouring of praise for King Abduallah was bizarre. The Washington Post labeled him a “reformer,” and The New York Times said he was a “force of moderation.” U.S. Secretary of State John Kerry took to Twitter to pay his respects. “King Abdullah was a man of wisdom & vision. US has lost a friend & Kingdom of #SaudiArabia, Middle East, and world has lost a revered leader,” he tweeted.

Sure, King Abdullah fought Al Qaeda and joined the World Trade Organization. But he also maintained an iron grip over his monarchy, a country in which women cannot legally drive and risk being beaten by religious police if they go out in public without facial covering.

So in many ways, King Abdullah was more of the same. And his successor, King Salman, will continue conservative geriatric leadership over his oil kingdom. This is evidenced by his speech earlier in the month, on behalf of the late King Abdullah, that Saudi Arabia will face the challenge posed by low oil prices with a “firm will.”

But in reality, the question of what happens to Oil Minister Ali Al-Naimi – and with him, Saudi oil policy – was in some ways much more important than which specific successor takes the throne. For now, Al-Naimi appears set to stay on according to the AP, at least through OPEC’s next meeting in June.

The Saudi government quickly assured the world that its oil policy will remain unchanged. The smooth succession and adherence to current policy calmed the oil markets, which saw prices retreat after briefly jumping by nearly 2 percent.

As a result, Saudi Arabia will continue its pursuit of market share – oil output will remain steady in the face of depressed prices.

The Saudi budget breaks even at somewhere around $63 per barrel, suggesting they will run a significant deficit this year. That is something the kingdom is willing to take on, given the $800 billion in cash reserves it has stashed away for a rainy day.

Will Plunging Oil Prices Crash The Stock Market?

When oil crashed in 2008 all hell was breaking loose. Lehman Brothers went up in smoke and stocks were in a nosedive. Oil has once again crashed -50% in only 6 months but equities haven’t followed – at least not yet! Will stocks hold up going forward? You might find it hard to believe just how much wealth could have been created last time this happened. If we learn from the past, this could be a second chance to make an absolute fortune.

The November 2014 decision to maintain output, followed by the collapse in oil prices, fueled some rather triumphalist speculation about how U.S. shale killed off OPEC. Yet the strategy Saudi Arabia laid out in November, which will be continued by King Salman, demonstrates full well Saudi Arabia’s influence over oil markets. As the only significant source of spare capacity in the world, it alone has the ability to voluntarily ramp up or down several million barrels of oil per day. For now, it is keeping the taps open, forcing a contraction from others.

And it has more staying power than U.S. shale producers. The number of active rigs in the U.S. fell by 209 between December and mid-January 2015. That is the fastest decline since data collection began by oil services firm Baker Hughes, dating back to 1987. Production cuts will eventually follow.

“Everyone tells us to cut. But I want to ask you, do we produce at higher cost or lower costs? Let’s produce the lower cost oil first and then produce the higher cost,” OPEC Secretary General Abdullah al-Badri said at the World Economic Forum in Davos.

Saudi Arabia is willing to wait out low prices. That means that the pain for U.S. shale producers should continue, and will likely grow worse before it gets better.

Claudio Descalzi, the CEO of Italian oil giant Eni, called on OPEC to cut oil production in order bring supply and demand into balance. “What we need is stability… OPEC is like the central bank for oil which must give stability to the oil prices to be able to invest in a regular way,” he said in Davos, according to Reuters. Descalzi says that OPEC’s failure to cut production could lead to oil prices skyrocketing to $200 because many private oil companies will push off drilling.

But that is exactly what Saudi policy could be aiming for: maintain market share, force others to cut back production, and reap the rewards of higher prices once they do.

Saudi Arabia’s entire economy is based on oil. The government brings in 85 percent of its revenues from petroleum exports. Whether it is Abdullah or Salman, the Saudi royal family’s preeminent concern is to ensure the longevity of its petrol kingdom. For now, that means no change in its current oil strategy.

This post originally appeared on OilPrice.com.

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