Opec strategy pays off

10 January, 2018 | By RICHARD THOMPSON

A series of events in the final weeks of 2017 provide a strong indication of what we can expect in the year ahead.

From an economic perspective, the most significant was the 30 November agreement between Opec and non-Opec oil producers to extend the oil production cap to the end of 2018. The move aims to rebalance global oil supply and demand, and remove damaging volatility in the energy markets.

The strategy is working. Oil prices are climbing and the improved outlook gives a degree of fiscal flexibility that will help governments to push ahead with difficult economic reforms.

An initial public offering (IPO) of shares in the fuel distribution arm of Abu Dhabi National Oil Company in December was the first of several listings planned in the region. This will be followed in 2018 by the Saudi Aramco IPO, which could be the biggest share sale in history. These sales pave the way for the more challenging privatisation of the region’s utilities and other state entities.

There is huge investor appetite to buy into the region’s prime assets, and as well as delivering substantial windfalls to governments, the privatisations will have a transformational effect on the region.

Set against this is rising political risk. The ongoing Qatar crisis, the anti-corruption arrests in Saudi Arabia and the missiles fired at the GCC from Yemen, all in December, could undermine investor confidence.

The coming year will continue to deliver shocks. But companies must not lose sight of the powerful, long-term fundamentals driving the region – a fast-growing, young population, an expanding middle class, ambitious and well-funded diversification programmes, and the world’s most abundant energy supplies.

Dubai’s construction market dropped sharply in second quarter

Contract awards have failed to keep pace with the large volume of projects that are now being completed Dubai’s construction market retreated sharply during the second quarter of this year, with ...

Timeline set for Kuwait chemicals complex completion

New olefins and aromatics facilities will be integrated with the Al-Zour refinery Kuwait’s planned petrochemicals complex at Al-Zour, which includes olefins and aromatics facilities, will become operational in 2023, four years ...

Dubai moves with contract award on new metro extension project

A consultancy team has been selected to work on extensions to the Red and Green lines A team comprising UK-based Atkins and Grimshaw, US-based Parsons and France’s Egis has been awarded the study and ...

Pipeline of GCC rail projects starts to look stronger

The GCC’s rail industry has been concerned about the lack of new projects for three years Five years ago, the rail industry was expecting the GCC to provide a steady stream ...

Coronavirus’ impact on Middle East economies

Medium-term risks analysed as Covid-19 spreads The rapid spread of the new coronavirus that emerged in the Chinese city of Wuhan in December 2019 has started to impact global economic markets. More ...

CONNECT SERIES: CONSTRUCTION MEGATRENDS

Insights from the MEED Mashreq Connect Series webinar on megatrends that will reshape construction in the coming decade Watch the complete webinar A hub between Europe, Asia and Africa, with vast hydrocarbons ...

US to reinvent future at Expo 2020

At its expo pavilion, the US plans to take visitors on a journey through space The participation of the US at Expo 2020 will highlight “everything about America – democracy, life, ...

MEED and Mashreq launch construction networking clubs

As part of a wider partnership, MEED and Mashreq are proud to announce the launch of our construction networking clubs. Over the next 10 months, we will invite construction leaders ...

Removing waste from UAE construction

Insights on reducing waste and improving efficiency in construction in the UAE Waste is one of the biggest challenges facing UAE construction. Poor planning, lack of skills and unfair contracts combine ...

Futureproofing the UAE healthcare sector

This is article is the fourth in a series from the MEED-Mashreq Healthcare Business Leaders Forum held on 23 February in Dubai. The event saw leading industry experts gather to ...

Dubai’s construction market dropped sharply in second quarter

Timeline set for Kuwait chemicals complex completion

Dubai moves with contract award on new metro

Pipeline of GCC rail projects starts to look